Benefits of Investing in real estate syndicates

Most investors who invest in private real estate limited partnerships are what the security and exchange commission (the sec) refers to as qualified investors. A qualified investor is one who makes $200,000 or more in the last two years or $300,000 if married, or have a combined net worth over $1,000,000 and or an institution or entity of similar members. That might be a bank, retirement system etc. Basically you have to be sophisticated enough to know what you are getting into.

It's a shame that the bar is so high as it stops me from helping a lot of people. On the other hand it protects the uninitiated from getting taken advantage of. The only way to help the less then so called elite is to use partnerships or consulting and I do both. As the returns from a well selected real estate limited partnership can be 12% to 20% per year you see what I mean.

Some of the benefits of investing in a real estate syndicate are.

• The syndicator is a specialist in real estate investing.

• A syndicate pools resources and thus allows owning of larger properties.

• Expert management.

• Tax advantages can pass through to the investors.

• A syndicate can make profits from rental income.

• A syndicate can make profits from capital gains.

• A syndicate can use leverage to increase returns.

• Freedom from management for the investors.

• Limited liability for investors

The syndicator is a specialist in real estate investing.
By investing in a real estate syndicate you take advantage of the experience of the syndiactor. The syndicator is a specialist with experience investing in real estate for the benefits of the investors. His knowledge and skills of finding, acquiring, managing and selling real estate to produce a profit is made available to his investors. The syndicator brings professional management to the investment.

A syndicate pools resources and thus allows acquisition of larger properties.

The syndicator by gathering a number of investors together makes it possible for the investors to buy a larger property then they could on their own. Larger multi unit properties are less risky as the more tenets the property has, the less a single vacancy effects the income stream.

Expert management.

Larger properties allow for economies of scale, making professional management affordable that might not be available with smaller properties. The management fees are less as a percent of income with the larger properties.

Tax advantages pass through to the investors.

Some tax advantages are available. The syndicator sets up the syndicate to allow any tax advantages to pass through to the investors. This is most often accomplished with a LLC or a LLP.

A syndicate can make profits from rental income.

A real estate syndicate owning income producing property makes profits from the monthly income. Earnings are distributed to the members of the syndicate in accordance with the terms of the syndicate agreement.

A syndicate can make profits from capital gains.

The syndicate can make a profit from increases in the value of the property over time. Improvements to the property that increase rents increases the value of the property at resale. If borrowed money is part of the deal, any reduction of principal on the real estate note(s) increases the rate of return on the investment at capital gains tax rates.

A syndicate can use leverage to increase returns.

The use of borrowed funds by the syndicate can increase the return to the members. While limiting the risk to the investors to the amount of their investment. This is possible anytime the cost to borrow is less then the net rate of return from the investment.

Freedom from management for the investors.

Responsibility for the everyday management of the syndicate and the syndicates property is assumed by the syndicate or those he directs.

Limited liability for investors.

Properly set up the syndicate can protect investor members from liability. This is most often accomplished by using a registered limited partnership form of syndication..