Looking at Real Estate Syndication? Here’s What You Need To Know

Owning real estate for investment purposes can be a great path to wealth. Depending on the property, it can generate predictable cash flow, capital gains and provide tax benefits. Besides being lucrative, real estate investing can be a hedge against inflation and an excellent way to diversify your investment portfolio.

What is Real Estate Syndication?

The structure of real estate syndication consists of two groups: syndicators and investors. The syndicators are real estate professionals of an investment company who team up with individual investors to make the syndication happen.

The Syndicators

As a partnership, the syndicators serve as the general partners (GPs) of the investment company that structure the syndicate and operate the property.

Passive Investors

Passive investors or limited partners (LPs) receive proportionate ownership interests and get monthly or quarterly income distributions from the rental income of the asset as part of their return on investment.

Benefits of Real Estate Syndication

– Passive investing is free from burdens from tenants to fixing things like toilets. – Investors can choose specific properties offered by GPs or through crowdfunding opportunities.

Benefits of Real Estate Syndication

– Receive income distributions. – Receive potential capital appreciation from the sale of the real estate project. – Tax benefits through K-1 tax filings from depreciation write-offs, pass-through deductions, or a 1031 Exchange.

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