Real Estate Syndication Structures

What is a real estate syndication.

Real estate syndication structures.

In the past only the wealthiest and most connected individuals could participate in real estate syndications. Real estate syndication structure. A limited liability company is a combination of a corporation and a limited partnership. This is probably the easiest real estate syndication structure to understand.

Alternative syndication structure 95 5. 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. Real estate syndication structure 1. After all these syndications would usually invest multi millions in commercial real estate.

7 ways to organize structure a real estate syndication sterling white expertise. In a limited liability company the owners can t be held responsible for the debt of. Let s start with a straight split. These structures can vary however and here we discuss an alternative way of arranging the sponsor investor relationship.

In general there are four components. Syndications in real estate are amazingly diverse in their structure so it s impossible to cover everything. 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. The final structure for investment property syndicates is a limited liability company.

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. It is usually created as a limited partnership lp or a limited liability company llc to own the property on behalf of investors. 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. 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.

As mentioned before the syndication may be created with a certain tax and legal structure. How to structure a real estate syndicate.