A real estate syndication is simply many people pooling their investment dollars together to purchase real estate that they normally would not be able to purchase on their own. Real estate syndications provide people the opportunity to invest in certain assets that they may know little about other than that it is an up and coming trend, such as mobile home parks, storage units, warehouses, etc. The general partners in the syndication will have the expertise to select the best assets for your investment dollars.
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Real Estate Syndication
Yes, Dirty Boots Capital is both a GP and an LP. As a limited partner (LP) we invest our money with general partners (GP) that we know and trust. Because we’re well connected to several GPs sometimes we will occasionally partner with them as a GP when it meets the needs of our clients. Either way, we look to provide investors the best solution which may not always be to invest with us directly.
Reach out to us via the online submission form. Tell us a little about your investment needs and we will get back to you with some options.
Investing in a syndicate can be a good investment. Two major factors are at play when determining the answer to this question. The first is to understand your investment goals. Are you investing for the short term or the long term? And how do you define short and long? Are you investing for passive income, equity growth, or both? The second factor is a question of whether you have fully vetted the syndicator. Do they have the proper financial, legal, and property management team in place? Have you had a conversation with them about the macroeconomic environment and the syndicate’s investment objectives? As long as your goals match the investment objectives of the syndicator, you should be set for success. But if you do not understand your goals, it will be easy to blame others if the investment “fails”, whether those people are the tenants, the real estate agent, the syndicator, or someone else entirely.
A real estate syndicate pools investors’ money (oftentimes, including their own) to afford them the ability to purchase a larger property that they otherwise would not be able to purchase. The goal of doing this is to maximize profit to the investors while minimizing risk.
There are two main differences between an equity REIT and a real estate syndicate. Firstly, a REIT invests your money for a certain period of time with a company that will buy and sell properties that they deem to be good investments. It could be an office building one day and a condo complex the next. You have no say. On the other hand, with a real estate syndication, you know exactly what type of property you are investing in and whether it aligns with your goals. Secondly, with a REIT, you may or may not get to share in the equity appreciation when the property is sold. You benefit from the income produced via the rents, but benefiting from equity appreciation may not be part of the REIT. In comparison, with a syndication, it is clear upfront how much of the equity appreciation will be dispersed to the investors (assuming there is equity appreciation).
No. A REIT is not the same thing as a real estate syndication. The main difference is that syndication investors need to be accredited investors while essentially anyone can invest in a REIT. In the case of a REIT, the SEC places greater responsibility (i.e., regulation) on the REIT than it does on the investors. You do not need to be an accredited investor to invest in a REIT. Instead, the SEC works to ensure that the REIT is responsibly managing your money. Conversely, to invest in a real estate syndication, you need to prove to the SEC that you – the investor – can wisely manage your own investment decisions. You can do this by becoming an accredited investor, which involves meeting at least one of the following income requirements: net worth, asset size, professional experience, or governance status. In other words, instead of applying greater SEC regulation on the syndication itself – as is the case with REITs – there is more regulation about who can invest in a real estate syndication. This gives syndications more investment freedom but restricts who can participate.
If you want to start a real estate syndication, you will need to become a syndicator, which requires a specialized team of SEC attorneys and financial experts who are familiar with the ever-changing requirements. It is a more advanced team than the typical investor has access to, but is required to protect the investors. Being a syndicator also takes an extraordinary amount of time and expense to find the best properties for investors. You might look at 100 properties before you find just one to buy.
Typically, a real estate syndication is structured as an LLC with the syndicator as the General Partner (GP) and the investors as Limited Partners (LPs). As a limited partner, after you’ve selected a syndicator to invest with, your job is done. It is up to the GP to manage the investment with property management, attorneys, CPAs, etc. Disbursements can be made monthly or quarterly (it is a case-by-case decision based on the investment), and there is typically a yearly call or conference for investors to attend for a property status update.
Real Estate Investing
An active investor participates in the daily, weekly, monthly management of a property whereas a passive investor relies on professionals to manage the property on their behalf. If you work for Apple and have stock, you are an active investor in Apple. If you are retired and own Apple stock you are a passive investor.
Yes and no. According to the answer above, you can be an active real estate investor through hands-on management, or a passive real estate investor through a syndication or other investment approach that puts the management responsibilities in the hands of someone else.
Rental real estate can be either active or passive. Which approach you choose depends on your goals, skills, and they time you have available to dedicate to your real estate investments.
No, you do not need a degree to invest directly in real estate. However, you will want educated people on your team who are experienced with real estate investing, such as attorneys, CPAs, and perhaps even your property manager.
There is no easy way to calculate the average income of a real estate investor because this metric varies widely depending on the investor’s experience, the type of real estate investments they make, how many investments they have, and more. It’s all over the place. A flipper can make $50,000 on a good flip in six months, whereas a multifamily investor may only make $200/month on each unit they own, but they have the benefit of property appreciation, infinite returns, depreciation, someone else paying down their mortgage, owning an inflation resistant asset, etc. How do you put a price on all those good aspects of owning real estate? There’s no right or wrong way to invest. It comes down to your goals. Either way, real estate can be very profitable.
Absolutely! If done correctly and with certain protections in place, real estate can be a great career, not only financially but also in terms of quality of life. You can do as much or as little as you want – you’re in the driver’s seat. You can work from your home with your spouse and kids while doing deals in other states. You can even travel and enjoy other parts of the country.
Fast is a relative term, and it doesn’t take into account the varying risk appetite from individual to individual. That is why we always speak directly with our investors to ensure we meet their needs and ensure they understand the risks as well as the opportunities.
One of the best ways to get started in real estate is through syndication. The leaders of a real estate syndication will already know the markets, have the right teams in place, and have the experience that most beginner investors do not have. As a result, they are able to take some of the risks out of real estate investing for someone who is looking to start investing in real estate rentals.
A good ROI on rental property is largely determined on a case-by-case basis. Connect with us and we can help you analyze a deal or determine whether you should hold, sell, 1031, etc. I once did a 1031 exchange by selling one property that was making $1000/month and transferred the proceeds (tax-free!) into another building producing $7000/month.
Rental houses can be good investments. Each investment property needs to be looked at on a case-by-case basis to understand the market conditions as well as the macroeconomic forces. If you buy at the top of the market and prices go down or rent controls are introduced, you can be impacted as an owner. Or if the economy is entering a recession, tenants may have a hard time paying. There certainly are pros and cons to single-family rentals.
If the opportunities exist and if done correctly, real estate renting can be profitable. Unfortunately, some investors enter at the worst times because others are saying how much money they are making. Usually, that is the worst time to get into real estate because the market is at the top. It is important to understand the big picture macroeconomics and what forces exist in the markets. This is where syndications have more resources available to better invest people’s money to maximize returns and minimize risks.
Real Estate Coaching
There are two main differences between an equity REIT and a real estate syndicate. Firstly, a REIT invests your money for a certain period of time with a company that will buy and sell properties that they deem to be good investments. It could be an office building one day and a condo complex the next. You have no say. On the other hand, with a real estate syndication, you know exactly what type of property you are investing in and whether it aligns with your goals. Secondly, with a REIT, you may or may not get to share in the equity appreciation when the property is sold. You benefit from the income produced via the rents, but benefiting from equity appreciation may not be part of the REIT. In comparison, with a syndication, it is clear upfront how much of the equity appreciation will be dispersed to the investors (assuming there is equity appreciation).
An active investor participates in the daily, weekly, monthly management of a property whereas a passive investor relies on professionals to manage the property on their behalf. If you work for Apple and have stock, you are an active investor in Apple. If you are retired and own Apple stock you are a passive investor.
Yes and no. According to the answer above, you can be an active real estate investor through hands-on management, or a passive real estate investor through a syndication or other investment approach that puts the management responsibilities in the hands of someone else.
Rental real estate can be either active or passive. Which approach you choose depends on your goals, skills, and they time you have available to dedicate to your real estate investments.
No, you do not need a degree to invest directly in real estate. However, you will want educated people on your team who are experienced with real estate investing, such as attorneys, CPAs, and perhaps even your property manager.
Absolutely! If done correctly and with certain protections in place, real estate can be a great career, not only financially but also in terms of quality of life. You can do as much or as little as you want – you’re in the driver’s seat. You can work from your home with your spouse and kids while doing deals in other states. You can even travel and enjoy other parts of the country.
Fast is a relative term, and it doesn’t take into account the varying risk appetite from individual to individual. That is why we always speak directly with our investors to ensure we meet their needs and ensure they understand the risks as well as the opportunities.
One of the best ways to get started in real estate is through syndication. The leaders of a real estate syndication will already know the markets, have the right teams in place, and have the experience that most beginner investors do not have. As a result, they are able to take some of the risks out of real estate investing for someone who is looking to start investing in real estate rentals.
A good ROI on rental property is largely determined on a case-by-case basis. Connect with us and we can help you analyze a deal or determine whether you should hold, sell, 1031, etc. I once did a 1031 exchange by selling one property that was making $1000/month and transferred the proceeds (tax-free!) into another building producing $7000/month.
Rental houses can be good investments. Each investment property needs to be looked at on a case-by-case basis to understand the market conditions as well as the macroeconomic forces. If you buy at the top of the market and prices go down or rent controls are introduced, you can be impacted as an owner. Or if the economy is entering a recession, tenants may have a hard time paying. There certainly are pros and cons to single-family rentals.
If the opportunities exist and if done correctly, real estate renting can be profitable. Unfortunately, some investors enter at the worst times because others are saying how much money they are making. Usually, that is the worst time to get into real estate because the market is at the top. It is important to understand the big picture macroeconomics and what forces exist in the markets. This is where syndications have more resources available to better invest people’s money to maximize returns and minimize risks.
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