Syndication Options FU

[Duke Giordano]

Hey Guys,

I am coming back after my first post a few weeks ago looking for hands off real estate investing options with the ability to finance with extra cash, I have had the opportunity to do some research and have a better idea of the language.  Have you found any resource that compares syndication websites or companies?  It seems there is a gap in this area as I cannot find this in particular.

I asked Bigger Pockets fi there was any recent Podcasts or articles comparing the best Syndication platforms out there for someone who only wants to be a financier but no pounding the pavment on MF Syndication directly.

Also curios about the tax implications of such deals such as ability to Depreciate, Different states issue, and ability to do 1031 exchanges.

If you have seen a recent article, or podcast could you direct me to it. If not would you consider it.

Lastly there is a so called group thats vets syndication deals for you (im sure for a fee), not sure if you have more info on them or your thoughts. (see below)

The group is called:

https://506investorgroup.com

It is a affiliated with crowddd.com

If you go to https://506investorgroup.com and click “join” one can fill this out and become part of what is a private google group of accredited investors mostly discussing real estate syndications.

The group leader requires a short phone call before joining to verify everyone is suitable. Be prepared to contribute, as well as learn from everyone else; and mostly to save yourself a bunch of time performing due diligence on syndications.

[Ian Ippolito]

Duke,

The reason you will not find a podcast comparing the best syndication is that they come and go extremely quickly and anything that might be created this month is probably going to be out of date six months from now. To be more specific, there are literally hundreds of new syndication to review every month, and most of them are not evergreen (meaning that they raise money for a limited time and then close, and then there is a new batch to evaluate).

Having said that, as a conservative investor, there are several sponsors that I like and that I closely watch every single deal that they put out. And there are some evergreen funds as well. Most of them market under rules where they are not allowed to publicly solicit.

But there are also plenty of resources out there to help you analyze the crowdfunding platforms and also investor clubs that have extensive libraries on sponsors and deals, and let you share due diligence with others. You can find most of these with a Google search.

As far as taxes: that is not something that can be answered in a small post as it's a complicated topic. But the very quick answer is that most equity investments have some tax shielding from depreciation. However, the format matters a lot as far as whether they allow passive pairing (certain K-1 investments where you can use the shielding from one to avoid paying taxes on multiple investments) or not (1099 div investments). And yes, sometimes you will have to pay state taxes, depending on the asset class and what the fund is investing in. 1031 exchange ability is generally not available, but in a few circumstances can be. There are some syndications that specialize in DST's which allow this but these also tend to come with hefty fees and up front commissions due to lots of middlemen. I personally invest in a sponsor that cannot publicly solicit, but is the only one I know of that has a 1031 exchange pipeline where you can easily exchange from deal to deal, and minus all the usual high fees.

As far as Patch of Land: at one time it was one of the most popular platforms with investors. It has now become one of the most complained about due to investors claiming it has a very high number of defaults.

For 37 parallel: I am a conservative investor, and personally have not found much to like in their deals. They also appear to target unsophisticated investors and spend alot of money on marketing (which are a red flag and yellow flag for me, respectively). Someone who's more aggressive, may be perfectly fine with them.

Before jumping into individual syndications or sponsors, I would actually recommend that you take a step back and look at your entire portfolio. First figure out what percent makes sense to allocate to real estate. Then educate yourself on the different real estate asset types, capital stack locations and strategies (which all have different risk reward profiles) and split your allocation among them. And only then start looking at individual deals. If you do the opposite where you're most likely going to end up with an unbalanced portfolio and taking on more risk than you would have otherwise.