Real Estate Syndication Structures

In general there are four components.

Real estate syndication structures.

Learn everything there is to know about real estate syndication with our guide. What is a real estate syndication. As mentioned before the syndication may be created with a certain tax and legal structure. A limited liability company is a combination of a corporation and a limited partnership.

These structures can vary however and here we discuss an alternative way of arranging the sponsor investor relationship. 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. 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. It is usually created as a limited partnership lp or a limited liability company llc to own the property on behalf of investors.

Real estate syndication structure. Alternative syndication structure 95 5. 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. The final structure for investment property syndicates is a limited liability company.

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. 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. Return of investor capital limited partners should always get paid back first and this ensures they get paid first. 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.

In the past only the wealthiest and most connected individuals could participate in real estate syndications. Real estate syndication structure 1. How to structure a real estate syndicate. 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 a limited liability company the owners can t be held responsible for the debt of.