Real estate investment funds

[Justin Moser]

Hello I am interested in buying into real estate investments but not owning. I understand there are funds that you can buy into that are used for real estate investments which give you a return. I am looking for advice for types of funds that give shorter and longer term returns. Thanks All the best Justin

[Brian Burke]

@David Ledbetter this is a matter of personal preference and your goals.  If you are looking for something totally hands-off, investing in a syndication might be a fit for you.  But if you are looking for direct involvement, buying your own rental might be a fit.

Then comes the question as to which delivers higher returns.  There's no answer to that question...just like every real estate purchase will produce different results, every syndication will too.

Most of our investors have capital to invest in real estate and either don't have the time to go out and hunt for deals, manage properties, get financing, etc, or just don't want to. But plenty of our investors do both--they buy their own SFR and small multifamily rentals and invest passively to get some diversification by exposing themselves to large multifamily and distant markets.

But if you are limited to doing only one or the other, it comes down to a matter of preference, in my opinion.

As to your tax question, there can be some tax advantages to syndication, such as accelerated depreciation if the sponsor uses cost segregation, and with the new tax law, pass-through entity tax treatment. But there are also tax disadvantages, such as the inability to 1031 in most cases. Although with syndicated offerings you can also invest through non-taxed entities such as a self directed IRA or solo 401k plan.