Are there any securities in Syndications

[Guy Idan]

Hey.

As a real-estate newbie, would love to hear your perspectives on this and learn. 

My question is - Is there any security for the LP when investing in a syndication? Meaning that if I go buy a 4plex for example, I have control and own the house. I paid $500K but I have a 4plex as a security against the $500K I paid, so as long as the property value doesn't go down due to some major economic crash, my $500K are safe in the house.

However when looking at syndications, if I put that same $500K and just as *one* example the GP is going bankrupt, from my understanding, I just lost $500K. 

Is that the case or am I missing things? 

Would appreciate your look on this.

Best,

Guy.

[Jeff He]

@Guy Idan

+1 to Nick's comment. In a properly set up syndicate, the managing member (GP) should be a separate entity from the entity where the assets are held. So if the GP runs into trouble (bankruptcy, goes to jail, etc), your assets are shielded and untouchable by the aggrieved party.

Always read the operating agreement carefully or get the GP to walk you through it. If they don't have time to walk you through it, then they're probably not someone you want to invest with.