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Why Limited Partners Love Real Estate Syndication

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Are you tired of playing it safe with your investments? Want to spice things up and take on a potentially lucrative option? Real estate syndication may be just what you’re looking for, and as a limited partner (LP), you can reap some benefits.

In this article, we’re going to explore the world of real estate syndication and why being an LP can be a fun and rewarding way to invest in real estate. From higher returns to less hassle, being an LP has some unique advantages worth considering. So put on your investor hat, and let’s dive in!

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1. Limited Liability

A key benefit is the limited liability protection from investing as an LP in a real estate syndication. It protects the investor from personal liability if the investment fails or incurs liabilities. So, for example, if a tenant slips and falls on a property owned by the syndication, the LP investor’s personal assets will not be at risk. Instead, the GP will be responsible for any losses or liabilities incurred by the partnership.

A National Bureau of Economic Research study states limited liability protection is critical in encouraging entrepreneurship and investments. The study found that limited liability is associated with a higher likelihood of investments and a more significant number of firms being created.

2. Passive Investments

Investing as an LP in a real estate syndication is a passive activity, meaning that the investor does not have to be actively involved in the day-to-day management of the real estate assets. Instead, the GP is responsible for managing the assets, and the LP investor receives a share of the proceeds based on the percentage of their investments.

According to a National Multifamily Housing Council report, passive investing in real estate is becoming increasingly popular, with many investors seeking to diversify their portfolios beyond traditional assets such as stocks and bonds. In addition, the report found that passive investing in real estate syndications can provide a steady stream of wealth and long-term capital appreciation.

3. Connect to Larger and Diversified Investments

Investing in a real estate syndication as an LP provides investors a connection to more extensive and diversified real estate projects that they may have yet to be able to approach on their own. The GP is responsible for identifying, acquiring, and managing the real estate assets, while the LP investor provides the funds.

According to a report by the Urban Land Institute, investing in real estate syndications provides a door to a wide range of real estate assets, including commercial properties, multifamily buildings, industrial properties, and more. In addition, the report found that investing in real estate syndications can provide diversification benefits to investors by allowing them to invest in various assets with different risk and return profiles.

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4. Potential for Higher Returns

Investing as an LP in a real estate syndication can provide higher returns than traditional investment vehicles, such as stocks, bonds, and mutual funds. The potential for higher returns is due to the GP’s ability to manage the real estate assets and maximize the return on investments.

According to a National Council of Real Estate Investments Fiduciaries report, real estate investments have historically provided higher returns than other traditional investment vehicles. For example, the report found that from 1999 to 2019, the total annualized return for real estate investments was 9.5 %, compared to 6.2 % for stocks and 5.3 % for bonds.

5. Tax Benefits

Investing as an LP in a real estate syndication can provide various tax benefits, including depreciation deductions, passive activity loss deductions, and capital gains tax deferral. These tax benefits can reduce the investor’s tax liability and increase their after-tax return on investments.

According to a report by PwC, real estate investments can provide various tax benefits to investors. For example, depreciation deductions can offset taxable wealth, and passive activity losses can be deducted against other passive wealth sources. Additionally, a 1031 exchange can defer capital gains taxes by reinvesting the proceeds from selling real estate assets in other qualifying real estate investments.

Investing as an LP in a real estate syndication can also provide specific advantages for busy professionals who may not have the time or expertise to manage real estate investments actively. Some additional advantages include the following:

6. Time Savings

Investing in real estate syndications as an LP can be a time-efficient investments strategy for busy professionals. The GP is responsible for identifying, acquiring, and managing the real estate assets, while the LP investor provides the funds. This allows LP investors to focus on their careers and other activities while still earning a return on their investments.

7. Expert Management

Real estate syndication allows LP investors to benefit from the expertise of the GP in managing real estate assets. The GP typically has experience and knowledge in real estate investments and can use this expertise to maximize the return on investments for the LP investors. This can be especially beneficial for busy professionals who may not have the time or expertise to manage real estate investments actively.

8. Limited Involvement

Investing in real estate syndications as an LP can provide limited involvement for busy professionals. The LP investor does not have to be actively involved in the day-to-day management of the real estate assets, allowing them to focus on their career and other activities. The GP is responsible for managing the assets, and the LP investor receives a share of the returns based on the percentage of their investments.

9. Diversification

Investing in real estate syndications as an LP can provide diversification benefits for busy professionals. The GP is responsible for identifying, acquiring, and managing various real estate assets, allowing the LP investor to invest in a diversified portfolio of assets. This can reduce investment risk and provide a more stable return on investments.

10. An Entry to Exclusive Deals

Real estate syndication can provide LP investors with a way to exclusive real estate deals that may not be available to the general public. In addition, the GP typically has a network of contacts in the real estate industry and can use this network to identify and acquire exclusive real estate assets. This can provide LP investors with unique creation wealth opportunities and higher returns.

Overall, investing as an LP in a real estate syndication can be a time-efficient, low-involvement, and diversification investments strategy for busy professionals. In addition, the expertise of the GP in managing real estate assets can help maximize the return on investments for the LP investors. At the same time, limited liability protection can provide additional security for their assets.

At Blueocean Capital, we offer a unique opportunity for investors to become limited partners (LPs) in our real estate syndication projects. As an LP, you get to enjoy the benefits of investing in larger real estate projects without having to worry about the details of managing the property. You can trust that our experienced team of professionals will handle all the work while you sit back and collect passive income from your investment. Plus, by investing with us, you can benefit from potentially higher returns compared to traditional real estate investments.

So why not consider becoming an LP with Blueocean Capital? It’s a great way to diversify your portfolio, earn passive income, and potentially achieve long-term financial goals. Join us today and let us show you how being an LP can be a rewarding investment opportunity!

You can also schedule a with us to learn more about our investment opportunities and how you can become a Limited Partner. Our team will be happy to answer any questions you have and guide you through the process.

Click here to book your call now: https://bit.ly/411R6VN

Let’s start building your investment portfolio together!

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What Is A Real Estate Syndication?

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By Fuquan Bilal

Real estate syndications are a term that is trending again. What are they?

Among the real estate investment opportunities on the landscape today are real estate syndications. How do they work? What are the advantages of syndicated real estate deals? How are they different from other investment strategies, and who are they for?

Real Estate Syndications 101

Syndications is basically another word for partnerships.

A syndication is an industry or technical term for when investors partner together to acquire, improve, manage and dispose of real estate assets together.

The one main difference between syndications and other types of partnerships is that there is generally one active partner to the deal. Also known as the ‘sponsor’. The sponsor is the one with the experience, connections, teams and systems to handle everything. The other partners bring their capital. Everyone shares in the rewards.

Syndications can be large or small, have few or many partners, and can partner on everything from pools of mortgage notes to value add multifamily apartment deals to ground up new construction projects.

Who Are Real Estate Syndications For?

Real estate syndications are typically reserved for accredited investors. Meaning those with higher levels of income or solid net worth.

This can include highly paid professionals like doctors, lawyers and tech workers. As well as celebrities, athletes, lottery winners and heirs to sizable inheritances. Entrepreneurs, family offices and real estate or private equity funds also often participate.

How Are Syndications Different?

The main differentiator of a syndication is that everything is done for you and you tend to get a split of all the profits, in contrast to investments where you may just receive a yield.

For example, a syndication for mortgage notes or apartment buildings may pay out cash flow dividends as income comes in, and then distribute a share of the gains on exit. So, you may get a percentage of the rents every quarter, and then a slice of the pie when resold. There are many combinations possible. For example a 90/10 split would mean the sponsor gets 10% of the profits and the other partners split the first 90%.

If you are an accredited investor, syndications can be highly attractive in providing a more direct investment and larger share of profits than simple investing in a fund or stock, and yet don’t require the time and headaches and risk of flipping houses or managing your own rentals or note workouts.
Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund

Fuquan Bilal

Fuquan Bilal founded NNG in 2012 with the principal mission of capitalizing on the growing supply of mortgage notes in the interbank marketplace. Mr .Bilal utilizes his 17 years of residential and commercial real estate success to identify real estate opportunities and capitalize on them. To date, he has successfully managed three private mortgage note funds that primarily invest in singlefamily performing and non­performing mortgage notes. His financial acumen and proprietary set of investment criteria enable him to purchase underperforming real estate assets at a deep discount of face and market values, thereby increasing the value of the assets. This, coupled with his ability to maximize the use of leverage, enables him to build strong, secured portfolios with solid passive income flows.