Why self-storage real estate syndication is on the rise
If you want to know more about real estate syndication, you’ve come to the right place. When it comes to real estate investing, there are so many new opportunities out there. How can you tell which is best for you? If you stop and take a moment to reflect on what is currently trending with real estate you’ll realize that multifamily, self-storage, out of state investing, and even crowdfunding are all on the rise. You may ask yourself: How can so many people find the time and money to invest? The answer is real estate syndication.Â
What is real estate syndication?Â
This process is more accessible to folks who would like to invest but may not have the funds to do so alone. Real estate syndication is when a group of people decide to join forces and put their money and experience together to make an investment in a piece of real estate. This process is done by two major groups.Â
How does real estate syndication work?
The first group is called, General Partners. This group is the group that may not have all the money to invest but holds experience and ties to others who do. The GP’s find the deal, gather the investors, and follow through with the process. In the other direction, we have the Limited Partners. This group may have a large amount of money to donate, but may not know where to invest or how. Thus, the two groups meet and fit like puzzle pieces. Each group has what the other group may need.Â
What are the benefits?
Real Estate Syndication is very beneficial to both parties because the GP’s get to find deals that fit their needs and wants. They also get to manage the deal and even make improvements on the property in order to sell it for more later if they choose to do so. The GP’s also get a large percentage of the money once the property is sold because of their work. The Limited Partners get cashflow on a monthly or quarterly basis, depending on the deal. To learn more about the pros of this process click here. (pro and cons doc)
Another benefit of real estate syndication would be the flexibility to invest in different projects. Real estate is a relatively broad term, indicating that there can be all kinds of investments to look into. A great example of this kind of out-of-box investment would be another popular trend at the moment, self-storage syndication. To see some pros and cons of real estate syndication, read this.Â
Where does the money go?
Ideally, the GP’s are going to make a deal that can give them some room to make improvements on the property. They do this so that they can raise the value of the property and eventually sell it for a larger profit. Most deals are usually 70/30, meaning that the GP’s will get 70% of the final profit. If you want to see a scenario of how this process could look for a limited partner, click here. (pros and cons doc)
Who is this ideal for?
This kind of investing is ideal for folks who have money but do not want all the work of a traditional investment. If someone decides to invest alone in real estate, they have to manage the deal from start to finish. With real estate syndication, the LP’s simply invest the money and wait for their checks to come in. However, there are some important things you should know about who may actually qualify to invest in real estate syndication. For more information regarding qualifications click here. (pros and cons doc)
Where to find more information on real estate syndication
There is a lot more information regarding real estate syndication. This topic is one that Karla Dennis & Associates wants to teach our followers due to its accessibility, flexibility, and feasibility. Real estate investments can be hard, especially when you do not have much experience. Real estate syndication is a great option to look into especially if you want to learn how to make large deals, or invest your money and let someone else do the work. The majority of these deals require a large investment, however, there are investments out there that can be joined with even a small sum of money. As always we urge you to speak to a professional before making any choices that will affect your money and tax strategy. If you want more information on real estate syndication click here!
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[…] syndication has the basic concept of real estate syndication, which we have detailed on this page. There is a group of investors who look for storage units that meet their criteria. This is based on […]