Why Syndicate Multifamily and Short-Term Rentals?

Real estate syndication is the affiliation of several investors. The investors combine their assets, skills and wealth to acquire property that would normally be impossible to acquire individually.

Syndication provides many benefits for the investors such as tax deduction, the option of investing passively and lower liability exposure. When people invest through a real estate syndicate, tax deductions are passed on them. The structure of Limited Liability Companies allow for investors to compound their money for years without paying any taxes on it until the property is sold.

Another beneficial reason is the option to be a passive investor. Investors in a real estate syndicate have a lower liability exposure. In an LLC and LLP syndicate, there are two groups of members. The members who make the decisions and the other side are the members who invest. There is no situation in which the members who invested can be found liable for any decisions that the managing members do. This will protect the investors from any potential lawsuits.

In a real estate syndication there is a syndicator who does most of the work such as negotiating, managing the group assets and procuring funds. If an investor is preoccupied with another affair, as long as they keep track of money that they invested, it will not heavily affect the syndicate.

The biggest benefit of real estate syndication is the ability to invest in multifamily projects instead of individually investing in single family projects. Multiple family homes are usually 2 or more units in the same building. There are considerable advantages in investing in multifamily property such as cost-effective, tax benefits, lower risk, fewer loans and can help scale an investors portfolio. However, the biggest problem with multifamily property is the cost. The cost is too high for most investors. Nevertheless, real estate syndicates can help solve this problem. Because there are multiple investors and multiple people managing the property, they have a higher capability to acquire more expensive property that would be impossible for an individual. Multi Family syndication are syndicates that focus particularly on multifamily property. Investing in these types of syndicates are incredible advantages to investors, especially beginners.