All Forum Posts by: Duke Giordano

The nature of the limited partner and syndicator relationship is at best "holding information back" and at worst "deceptive or untruthful".  This dynamic needs to change and hopefully difficult times like we are currently in will force limited partners to demands more transparency.  Some of us in the industry are fighting to help with that for the limited partner, and hopefully that comes to fruition in the near future.  

Agree with Scott, there needs to be more transparency in this industry and sponsors need to be held accountable for their performance and their action.  Passive pockets is one place to do this there are certainly other places where you can look in particular when deciding to invest in a deal beforehand since that's truly our only control point as a limited partner.  I'm afraid unfortunately over the next 6 to 12 months they will continue to be more stories like this, but hopefully on the other side we will come out a better industry for both sides.  

@Brian Burke and @Chris Seveney are studs in the space, and their advice is spot on.  

Having said that, as an LP myself in 30+ deals, and collaborating with many other LP's the main reason myself and others choose to invest in syndication via LLC is the anonymity that could come along with it from outside litigation. Thus if someone is say a medical doctor, they may want to shield (or at least make it difficult) for outside liability if they were to be sued personally in their day job or elsewhere. Separately, if one might want to invest as a trust, via the LLC it may make some estate planning slightly more consolidated. One can also just invest via a living trust as well without the LLC. Bottom line as others have said this is a situation to enlist competent legal guidance in this scenario to review the pros and cons.

There are similar tools out there if you dig a little to find them.  

Now is the right time to reevaluate the due diligence process, as I don't have to tell many women partners distress in the market with a positive tribulations and capital calls that are coming down the pike.  

Revisiting this.  With the advent in real estate syndication's of the unfortunate unplanned capital calls for limited partners I think this becomes more important to understand the nuances.  Are there any CPAs or accountants willing to speak in general terms as to how syndication losses at the time of a real estate syndication disposition could be taken advantage of?  As the original poster said obviously there's limitations to passive losses or depreciation etc. to only offset passive income.  But with many deals facing the stress these days for deals where investor loses their original capital what are the implications or options and the tax treatment of that, and how would it be different than just a simple depreciation which is limited by passive losses?  What circumstances could this offset W-2 income even for those who are not real estate professionals?

@Matan Paret

Matan,

As a fellow physician and real estate investor I was in your shoes 10+ years ago.  First thing i will say, take your time, and be patient.   Next you should at this juncture be focusing on big picture things like paying off any high-interest debt, credit cards, student loans, saving for a down payment eventual home purchase and focus on your family.  Once you have all of the above which typically occur somewhere in the 5 to 7 years post residency, then my suggestion would be considered passive investing through syndications.  Unless you intend to someday transition out of your physician job many physicians find that password investing via syndications is a more hands-off way to diversify your income, and tax in a favored way.  However, you need to focus on your education and proper vetting of the syndication deals in order to know what you're investing in.  This education requires time and dedication although you can certainly do it and there are many websites out there and help provide resources for it.  I'm happy to help anyway I can please feel free to reach out.  

Adam,

Your asking the right questions, and need to really evaluate where you want to be in terms of direct involvement, and the time and potential liability risk you are willing to accept.  If your income is that high, and if you are Dr. such as myself I examined the same questions you did seven years ago when I first started investing in real estate syndication as a passive investor.  Although right now is a fairly tumultuous time to get into the space I would do what you can to dive into education as to how to evaluate deals and what you eventually want your portfolio to look at both in terms of composition and risk profile.  Once you get clear on that understanding then you're ready to invest and that should line up with a time hopefully when the opportunities are better in the space than they are right now and say 8 to 16 months.  Happy to help anyway I can.

Hello Ryan,

I would start with @Brian Burke book "Hands off Investor" as well as some other books such as "Investing in Real Estate Private Equity" by Sean Cook.  Both are great reads.  There are some excellent website out there, but I would just caution be sure that the platform is not raising capital or being compensated by the sponsor in some way as you can see as to how that would be a built in conflict of interest.  Happy investing, and happy to help if you need further guidance.

As many have stated, you need to be clear on if you intend to be a passive investor (invest your money in other peoples deals) or an active investor and buy your own rental properties etc. where you manage everything on your own.  There are several resources for each of those categories, but the vetting process for each has unique nuances that are slightly different.  

Agree, being a passive investor has a lot more land mines in the current environment than a few years ago.  Having said that, everything runs in cycles and soon there will be a great opportunity for those passive investors who are ready to take advantage of the current fall.  Many have already seen this firsthand but the worst is yet to come unfortunately.  There are good resources out there for passive investors if you dig a little, focus on your education and build up cash reserves for the upcoming opportunity.  Be wary of those passive investor sites that are pitching you deals that they are incentivized to do so, without any vetting.

Happy to help any way I can