Poll: Have you invested in syndications before?

[Rene Hosman]

This weekend I was lucky enough to attend an MFIN - Multi Family Investor Network - conference here in Colorado and see BiggerPockets CEO @Scott Trench share the stage with @Ben Suttles and @Feras Moussa talking about the future of real estate investing, plus a number of other keynote presentations and informative breakout sessions. This was a conference for mostly private equity firms that raise money for and invest in large multi-family deals, and truthfully I felt a little out of my depth. I consider myself well-versed in real estate knowledge and business jargon, but syndications really have their own set of lingo - starting with the word "syndication" itself! So I was a bit nervous going into rooms with people who live and breathe multi family.

I went partially for my own knowledge, and to see Scott speak, but also because BiggerPockets has officially launched our new platform, PassivePockets, this week. PassivePockets is for those interested in truly passive real estate investing through syndication, so I needed to begin to educate myself more on this real estate investing road that I hadn't yet considered for myself.

Here's a few things I learned from MFIN that I think apply to the greater BP community

• Multi-family and large investors are in the SAME BOAT that we are in as small-time investors. Interest rates have been crushing, or at least compressing deals for them just like interest rates have been causing trouble for small investors like you and me. Some might take this as a sign to turn away from real estate investing right now but to me, I felt optimism actually. Large companies and equity firms obviously have more resources at their disposal than a small investor, but to me I couldn't help thinking about all of the tools and extra benefits we get as small investors. We get primary residence loans for <10% down, we have the power of creativity, and if we're planning smart - we also have the opportunity to ride the wave of interest rates because we're much less dependent on adjustable rate loans.

• If you want to get involved in syndications or passive real estate investing but you don't have enough in liquid cash for the minimum investment, you can use your retirement accounts like a self-direct IRA to do so! I consider myself fairly financially literate, and I had never considered this option. In my mind syndications were for later in my career when I had a lot of cash liquidity, my rationale was if I had 20-50k liquid at this point I'd just put it into my own deals. But I am actively saving for retirement, mostly invested in index funds, and I hadn't considered that I could use some of these retirement funds. I don't consider these funds liquid or available for REI usually because using that money for my own deals would require withdrawing it and paying penalties. But I can consider rolling some of my retirement accounts into a self-directed IRA and investing in syndications that way if I wanted, and still enjoy all the tax-free growth in my retirement account.

• Bonus depreciation is winding down, as many of us know. But did you know that if your rental was placed into service before 2022 that you can still recapture the tax benefits of 100% bonus depreciation if you do a cost segregation study? If you have no idea what I'm talking about when I say bonus depreciation or cost segregation study, here's a few good resources for you:

Cost Segregation overview blog post
Cost Segregation podcast episode
Bonus depreciation blog post

My questions for you all this week is related to syndication investing, I want to know - have you invested passively in a syndication before? How did weigh which of the many deals out there to invest in? What kind of due diligence did you do on the operator before you handed over your money?

If you haven't yet invested in a syndication, do you plan to? Is this something you're thinking about doing soon? Or something that you think you'll eventually move on to when your personal portfolio is where you want it to be? And if you haven't invested in a syndication before, what questions do you have for those who have experience with this kind of investing?

PS. A huge thank you Disrupt Equity team for hosting MFIN in the Rockies this past weekend!

Poll: Have you invested in a syndication before

[Andrew Syrios]

I haven't but mostly just because we need our capital for "active" real estate investments. Real estate is, after all, very capital intensive. I see investing in syndications as a much more passive form of investing.