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4 Benefits of Real Estate Syndication

When most people think of real estate investing, they think of buying a property on their own and making money off leasing or renting it to other people. However, there is an alternative way of looking at real estate that is much bigger than traditional real estate investing- this bigger picture in real estate is called real estate syndication or passive investor real estate, and it’s an excellent option for people looking to make a big real estate investment with a limited amount of responsibility.* So, how does real estate syndication actually work? In real estate syndication, many owners get together and pool their resources in order to purchase real estate. This property is usually much larger or bigger than any one investor would purchase on his or her own. There are many benefits of real estate syndication, and its rewards are clear as more and more investors opt for this crowdfunding method of real estate investing 1. Lower Financial Risk Most Syndication are set up with a general partner and passive partners. The management risk in the investment, thus, is with the general, however the general partner gets to use collective sum other people’s money for the investment. The passive investor only invested a limited amount, and their greatest risk is losing their original investment. 2. Greater Knowledge Like the saying goes – two heads are better than one. And, in the case of real estate syndication, real estate investors get to take advantage of the fact that they can rely on the knowledge of a group of investors, and not just the knowledge of one. Owners in real estate syndicates are often able to take advantage of the expertise of people who come from a wide-range of backgrounds, which means they can make smarter decisions with financing and managing the property. 3. More capital Upfront With more investors, there is more capital or money available upfront, since there are many accredited investors involved. This means that a bigger payment can be put down on properties from the beginning, yielding lower monthly payments, as well as more available money for rehab, upgrades, and maintenance. 4. Less Involvement Because a real estate syndication consists...