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daveg
Investor/Rehabber
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Real Estate Syndications
Wednesday, February 20 2008 06:55 AM
Anyone have any experience buying into a RE Syndication group? Pros and Cons? Looking at a well established company in Palatine investing in multiunit bldgs (>100 units) in Ohio and Indiana.
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Randy Hughes
Master Advisor-39 years of experience
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Re:Real Estate Syndications
Wednesday, February 20 2008 03:38 PM
Dave,
Yes, i have had experience and it was not good. Experience tells me that the developers & promoters end up with the money...and you end up with a tax loss (that you can only use at a rate of 3,000/year).
Tread lightly, move slowly, investigate, do not sign anything that you do not READ first!
Good Luck,
Randy Hughes
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Marty Couch
Investor
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Re:Re:Real Estate Syndications
Wednesday, February 20 2008 06:32 PM
Hey Dave,
Real Estate Syndications were big until the tax reform act of 1986. The new tax reform eliminated alot of the tax shelters and loss advantages passive investors were able to take.
So, in effect the real estate syndication model had more profit in the loss than in the deal. Passive investors were able to keep more money from other sources with a real estate loss through the limited partnership they bought in to because of better depreciation rates, etc. It seems this business model went by the wayside somewhat since the mid '80s.
There might be some profitable deals where this model will apply. How ever, as a passive investor in the LP, LLC, etc you will not have any control over how your investment is handled.
I agree with Randy on this one. I know a great deal of very active investors and I don't know of any who are investing this way. If anyone has any experience to the contrary I look forward to reading about it.
Hope this helps.
Marty Couch
http://www.PPLChicago.com
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daveg
Investor/Rehabber
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Re:Re:Re:Real Estate Syndications
Thursday, February 21 2008 11:22 AM
Marty, (and Randy) thanks for that input. I am aware of most of the cycle you described from back in the 80's, losses, etc. I think I am looking at a very well run local syndicator, but I am still doing due diligence on this investment vs what I normally do -which is to go and get cheap fixer uppers and do the usual buy and hold.
Marty, can you send me your email address again? I don't have it here on this machine. I have more to add....
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