@Todd Dexheimer has covered a lot of this and makes a great point on the returns. They are appear high, I would definitely do my homework.
In regards to your specific questions @Rama Krishna ... Full disclosure, I now work for an asset management firm and I represent syndicated deals in the Kansas City metro area. However, I got there by asking the same questions you are. I knew I liked real estate as an asset class, but I wasn't sure how I wanted to invest in Real Estate. In the end, like @Todd Dexheimer said, it was a decision based on personal preference. I would also point out that when doing it long distance you will need to find the right team for either investment model.
I prefer syndication for two few main reasons...
- It is truly passive. If I wanted to I could treat it like any other part of my portfolio and have minimal time spent on the investment beyond my homework. However, this only comes AFTER you have picked a group provide syndication and you have really done your homework on them. Make sure you like and trust the people. You know their model and how they are structured. The more questions someone asks me about our company and the people/model the better. I know they are asking the right questions. Many people can find a good investment or make something look like a good investment. You need to make sure your values and goals align with the people you choose and that you trust them. (I recognize this is a moot point since I now work full time in syndication, but that's just because I grew to love it!)
- Larger Volume/Less Volatile. I became very interested in real estate investment at the SFR level because that is what I understood. However, it scared the crap out of me that I would be on the hook for the mortgage payment each month I didn't have a tenant. I felt like a lot of my investment was banking on a good tenant. I know it works well for a lot of people, but it really scared me. I wanted lots of rental payments and units so that I could afford to have one or two vacant units or late payments and not need to stress about cash flow. At the same time I didn't have huge sums of money to get the large unit count I wanted personally. Syndication allows me to put my money in with others and buy a larger more stable investment.
That being said, each person needs to make their own decision as to what investments fit their goals and current needs. I am selfish with my time and want more stability, as a result I am willing to sacrifice a fraction of possible gains to have those needs met.
Hope this helps, and good luck!
