Blog

Once you get wind of real estate syndications and you begin thinking about the possibility of investing passively in them, it’s natural to simultaneously have questions… lots of questions.

Once you choose a real estate syndication deal, sign the PPM (private placement memorandum), and send in your funds, you have very little control over the performance of the asset. You’re truly a passive investor at that point and must fully trust the sponsor team to manage the daily operations effectively, execute the business plan, and guard (and grow!) your investment.

If you’ve ever experienced owning single-family or multifamily homes, you know that these investments require time and energy.

Investing in residential real estate can be challenging because, typically, you as the investor wear many hats throughout the seemingly never-ending process. Responsibilities include finding the property, negotiating and funding the deal, renovating the property, interviewing tenants, and even performing maintenance.

Take a moment to think about the process that you used to find the home you’re currently living in.

You likely had a checklist that included a specific area, school district, commute, and the number of bedrooms you were looking for. If you were looking for a three-bedroom with plenty of green space in mind for your growing family, it’s very unlikely you would have settled for a one-bedroom high-rise condo, even with a great view.

Have you ever known a new mom? She likely has stashed packages of baby wipes everywhere. In her purse, the diaper bag, multiple places in the baby’s room, in the master bedroom, in the car… it’s likely that anywhere she and the baby might be, a stash of baby wipes is near.

The purpose, of course, is to prepare for those unexpected moments that accompany having a new baby. That new mom might not know exactly what to expect, or when a surprise spit-up will happen, but she knows to expect the unexpected.

I know I’m not alone when I share that I came from a working middle-class family with parents who, unfortunately, had no personal finance knowledge beyond getting an education, finding a steady salaried job, and saving any pocket change possible into a small savings account.

Imagine spotting an old bookshelf sitting out on the curb. You pull over to check it out, and since it’s in good shape, you proceed to lug it home and give it a fresh coat of paint.