6 Incredible Benefits of Passively Investing in a Real Estate Syn

[Justin Goodin]

📌6 Incredible Benefits of Passively Investing in a Real Estate Syndication (group investment). 👇

1️⃣ Cash Flow - Real estate syndications typically provide monthly or quarterly distributions which you will receive directly to your bank account. Cash flow will allow you to live a life by design NOW VS. waiting until you retire so you can use your 401K.

2️⃣ Passive Income - Investing in a real estate syndication allows you to make a one time investment in the beginning, and then sit back and watch it grow. You are essentially collecting 'mail box money' on a hands off investment while experienced operators manage the asset.

3️⃣ Returns - Real estate syndications, on average, offer higher returns than other investments. We typically look for opportunities where we can provide our investors at least a 10% cash on cash return, at least 100% return, and at least a 15% IRR (with a 7% or 8% pref).

4️⃣ Experienced Team - Investing in a real estate syndication allows you to leverage an experienced team like we have at Next Level Equity. We do all the work so you can focus on things that matter most to you.

5️⃣ Diversification - With real estate syndications, you are able to invest in many different high growth markets. The investments do not necessarily have to be located in your home city.

6️⃣ Tax Advantages - This is HUGE! Investing in real estate can often help lower the amount of taxes you owe, even while you’re making great returns on your investment.

Did I miss any? What are some other benefits from investing in a syndication?

[Evan Polaski]

@Nick B., I am not an accountant (gotta CYA) but am both an active and passive investor myself.  My view is there are some very real tax benefits regardless of your QREP status.  While the cost seg and massive pass through losses may not be realized, simply receiving payouts that get classified as owner distributions on a K-1 already defers taxes (assuming the property is being operated from a tax perspective at a break even or loss).  Classifying as a distribution both defers current year taxes and pushes the profit from sale (which from a tax perspective will look at that write down of capital balance) as a long term capital gain.  For many investors, this means you deferred any tax on your distributions at the ordinary income rate, and paid it back at a much lower rate. 

Take the time value of money for years of deferrals combined with an effective rate at roughly half your income rate and you have a fairly sizable tax advantage for any person.  Of course, this assumes the sponsor is classifying your payouts as distributions.