Investing Passively in Real Estate Syndications

Investing Passively in Real Estate Syndications

Historically, a real estate syndication was considered an investment strategy for the extremely wealthy and well-connected only. In today’s world, they are available to sophisticated, well-informed investors. As a result, the rest of the investors can benefit from this investment strategy to build wealth and generate financial freedom in their lives.

To make it easier for you to understand and invest in real estate syndications, this article provides foundational information and knowledge about the strategy.

Real Estate Syndication: A Passive Investing Guide

Professionals spend much of their time working or running their businesses if they’re self-employed. However, this won’t stop them from getting some exposure to cash-flowing passive investments, even though most of their time is devoted to their active job.

Actively operating a property and implementing a business plan requires special expertise and full-time attention. The process entails finding deals, performing due diligence on it, obtaining funding, closing on it, overseeing construction, managing assets on a daily basis, and more.

When you own a rental property as a real estate investor, you’ll have to deal with all the tedious stuff that could go wrong with it. You should be able to cater to your unique tenant base’s needs even at 3 a.m. A popular saying goes that to own 100% of the project, you have to do it all yourself. 

Now, some people may find that appealing, but not everyone. As a result, a real estate syndication is a great passive real estate investment strategy as well as a good option for limited partners (LPs). In addition to generating passive income from real estate, it offers all the benefits without headaches.

How Does Passive Investing in Syndications Work?

In general, a syndication is a form of real estate investment that allows a group of investors to pool their resources and business expertise in order to acquire and manage properties of a size they could not acquire and manage on their own. By investing in the company, they become part owners and share in its financial success.

In essence, real estate syndication buys investments together. In this approach, investors passively invest, and a team manages the business plan. As a result, rental income or profit from the sale of the building can then be enjoyed by everyone.

Six Key Benefits of Passive Investment in Syndications

It is possible to invest passively in real estate syndication and reap many benefits, including these six significant advantages:

1. No Time Required

It is as simple as investing a small fee and then watching it grow. A team of experienced operators, like Saint Investment Group, will assess the investment and develop the systems and local teams to ensure success. 

Passive investors do not have to put any time or energy into all three phases of real estate syndication, making it easier for those with full-time jobs and other priorities to invest.

2. Managed by Experienced Teams

Syndication managers perform the most thorough due diligence on these types of deals. A key part of this process is gaining deep market knowledge, understanding risk parameters, and developing return assumptions, which must then be communicated transparently to potential investors.

They handle everything for you, so you can invest long-distance and don’t need any experience of your own. 

3. Great Returns

You can diversify your portfolio away from the stock market by investing in syndicated deals, which offer higher returns than many other investments. How much real estate syndicators make depends on the deals, with expected returns ranging between 14% to 17% on an annualized basis.

4. Stable Income Stream

You receive monthly/quarterly dividends that go straight to your bank account, and not many investments provide dividends like this.

5. Diversification

Diversifying your investment portfolio with these deals will offer you added protection during an economic downturn because people will still need homes, especially during hard times.

As opposed to stocks, which can lose all value and disappear into cyberspace, these investments are collateralized, meaning they are backed by a hard asset.

6. Tax Advantages

Investing in these types of deals can provide investors with a number of significant tax advantages, resulting in higher incomes for investors.

How to Evaluate a Real Estate Syndication Deal as a Passive Investor

As an inactive investor, evaluating a real estate syndication transaction is a crucial stage in the business process. The track record and expertise of the syndicator are important factors to take into account. Investors should evaluate the syndicator’s track record of handling assets of a comparable nature as well as their capacity to carry out the investment’s business plan. The precise conditions of the investment, such as the fees levied by the syndicator, the anticipated returns, and any possible dangers involved with the investment, are another crucial consideration. Along with the property’s location, health, and possibility for increased revenue, investors should take these factors into account.

It’s crucial to perform extensive due research on the business chance before deciding how to assess a real estate syndication transaction as an inactive investor. In order to determine the property’s prospective worth, this may entail examining the financial statements, performing site inspections, and undertaking market research. To make sure the purchase fits with your financial aims and objectives, it may also be beneficial to speak with experts like lawyers, accountants, or real estate agents. In the end, investors should thoroughly examine every element of the investment chance and then decide based on their risk appetite and investment objectives.

Getting Started With Passive Real Estate Syndications

You can build financial assets over time by passively investing in real estate without having to manage a building project or be a landlord. As a first step towards investing in a real estate syndication, it is important to understand the basic passive real estate investing terms and how syndication works.

Fortunately, Saint Investment Group provides all the information you need about real estate syndications and passive real estate investing. We offer real estate investment opportunities to select investors through syndications. Our business is our life, so we dedicate extensive time to looking for potential markets—and great deals and executing the vision we have for it.We are passionate about the process, and we would like to offer you the opportunity to build long-term wealth with us. If you’d like to learn more on real estate syndication fees and other real estate investing topics, send us an email at or call us at 949-881-7128 at Saint Investment Group today!

Frequently Asked Questions:

What is a real estate syndication?

When several investors pool their money to buy and run a property, this procedure is known as real estate syndication.

What does it mean to invest passively in a real estate syndication?

An owner who contributes money to a real estate syndication but does not actively handle the property is said to be participating passively. The property must be managed and choices must be made on behalf of the owners by the syndicator.

What are the potential benefits of investing passively in a real estate syndication?

Access to investment possibilities that individual investors might not have, portfolio diversification, and the possibility of higher returns than with conventional investment choices are some possible advantages.

What types of fees can investors expect to pay when investing passively in a real estate syndication?

Investors can anticipate paying fees like purchase fees, administration fees, and other syndication-related administrative costs. Depending on the amount and intricacy of the investment, these fees may change.

What should investors consider before investing passively in a real estate syndication?

Investors should consider factors such as the experience and track record of the syndicator, the specific terms of the investment agreement, and the potential risks and rewards of the investment.