Real Estate Syndication Structures

A limited liability company is a combination of a corporation and a limited partnership.

Real estate syndication structures. It is usually created as a limited partnership lp or a limited liability company llc to own the property on behalf of investors. In a limited liability company the owners can t be held responsible for the debt of. As mentioned before the syndication may be created with a certain tax and legal structure. This is probably the easiest real estate syndication structure to understand.

Syndications in real estate are amazingly diverse in their structure so it s impossible to cover everything. In the above scenario you will form a separate title holding entity that is also the borrower on any bank loan and sells interests to investors the investor entity. Alternative syndication structure 95 5. Commercial real estate personal finance real estate marketing business management landlording rental properties real estate investing basics personal development real estate news commentary mortgages creative financing.

The final structure for investment property syndicates is a limited liability company. These structures can vary however and here we discuss an alternative way of arranging the sponsor investor relationship. Learn everything there is to know about real estate syndication with our guide. Real estate syndication is a way for investors to pool their financial and intellectual resources to invest in properties and projects much bigger than they could afford or manage on their own.

We ve earlier described sponsor syndicated private real estate investments and some of the more typical structures used to divide the returns between the sponsor and the investors. Let s start with a straight split. In the past only the wealthiest and most connected individuals could participate in real estate syndications. What is a real estate syndication.

Real estate syndication structure. As the name would suggest this deal structure uses the same split across the board for all returns cash flow as well as any profits from the sale of the asset. How to structure a real estate syndicate. Return of investor capital limited partners should always get paid back first and this ensures they get paid first.

After all these syndications would usually invest multi millions in commercial real estate. If you use a limited liability company llc as the investor entity it will be manager managed with a manager and members as the passive investors.