A real estate syndication- what's that? Quite simply, a real estate syndication pools together money from different investors. Instead of buying small properties one at a time, people like you pool funds and buy a larger asset. It is a smart and simple way to grow your wealth!
Why a Real Estate Syndication?
You have some money saved up. Perhaps you've invested in the stock market, and maybe you have a decent amount in your savings account. You've heard about the many benefits of real estate investing, the tax breaks, the passive income, and the positive impact your money can have on your retirement fund, families, and communities.
So, let's pretend you have $50,000 for investing outside of your other savings and retirement funds. There are millions of real estate listings out there. You could invest in an individual rental property. How would you ever have time to research neighborhoods and markets, tour properties with agents, and sign all that paperwork? Just thinking about it is exhausting. The overwhelm is why most people decide real estate is too hard and too much work and say no to real estate investing.
Sound familiar? If this is you, one of the best opportunities for you to get started in real estate investing is through passive real estate investments, either through turnkey rental properties or through commercial real estate syndications.
On a smaller scale, you could get into turnkey rental properties. Turnkey is you buy it, and it's ready to go, with minimal involvement or work needed.
Real estate syndications allow you to put your money into real estate without working to find or manage the property yourself. Instead, you can invest your $50,000 into a real estate syndication as a passive investor. You contribute $50,000; maybe a friend has another $50,000 to invest, someone else puts in $100,000, and so on and so on.
By pooling resources, the group would now have enough to buy something more significant than a single rental, like an apartment building. As a passive investor, you don't have to do any of the work managing the property. A lead syndicator or sponsor team does the day-to-day management (i.e., all the active work). In return, they get a small share of the profits.
When done right, real estate syndications are a desirable proposition for everyone involved.
Real estate syndication is a nearly perfect way for a person like you to invest in large-scale, physical real estate assets without the commitment of time or excessive mental energy. The bonus is you are also positively impacting the community and earning interest and tax benefits. Sound good so far?