Not ready to be a landlord? How about a Syndication instead?
When most people think of investing in real estate, they immediately think of being a landlord (aka: toilets, tenants, trash, and TROUBLE)!
While this can certainly be the case and one route you can go when investing (I can tell you many stories on the landlording front), it’s not the ONLY option. My husband and I had no idea that there was this option called, “syndications” or group investments years ago.
I started working for a firm that invested as a group and consequently was able to purchase larger deals in markets they wouldn’t have normally been able to get into. We brought on investors from all over the country who wanted to invest in real estate and take advantage of the benefits, but weren’t ready to be landlords!
The most important piece of this is doing your due-diligence and finding the right company to invest alongside. There’s a lot of questions you should be asking these potential partners early on like:
1) Where do you invest?
2) What do you invest in?
3) What is your investment strategy?
4) How long have you been in business?
5) What is your track record?
6) Who is on your team?
7) How do you find deals?
8) How do you manage those deals?
9) What types of returns do you look for?
10) Do you invest personally in your deals?
11) What’s your view on debt and what is your typical LTV (loan-to-value) when purchasing a property?
12) How long do you hold the property?
13) Have you always paid your investors distributions?
14) What is your exit strategy?
15) Have you ever filed bankruptcy and what would I find if I ran a background check?
16) How do you communicate with investors and how often will I receive updates?
17) Can I go visit the property?
18) Will there ever be a capital call?
* There are many more questions, this is just a start…PLEASE do your due diligence!
My husband and I have had the chance to invest as Limited Partners (LP) in a number of deals in Oklahoma, Arizona, Wisconsin, Texas, Florida, Georgia, and more. We are part-owners of hundreds of apartment units, self-storage, mobile home parks, and an assisted living facility.
It’s amazing to have that diversification of real estate and a majority of the benefits (cash flow, appreciation, tax benefits, hands off nature) without the hassles of being a landlord. We are still active investors and there are some great benefits on that front too (blog for another day).