Accredited Investor, No Experience. Syndication vs Actively Owned

14 Replies

If you are an accredited investor and could start over again, would you actively own a property or invest in a reputable passive deal (Crowd-funding, Syndicate)? There's a lot of control with value add but passive deals are smaller and could be easier to learn from with less risk. 

I really would prefer to own outright especially given my credit is north of 790 and I can get good terms (regular W-2 job at reputable firm, no current loans). 

You can do both as well. Actively invest in your own deals and use some money to passively invest and learn 

Account Closed Todd is right, you can do both, but should you? If you're brand new to real estate, there is going to be a steep learning curve that might take you a bit to get up to speed on. Perhaps you could passively invest until then, but i've thought for a while if you're happy in your job and making really good money there is no reason to leave that. Build your portfolio on the side and retire when you want. 

As for terms, if that's your only reason, I doubt you can get anywhere close to loan terms for multifamily syndications. I just got a term sheet yesterday for a property i'm working on and it was non-recourse, 12 year loan, 30 year am, 3 years I/O at 3.90%. That'll be tough to beat in commercial.

I'm with @Todd Dexheimer  I would do both.  Passive investing in Syndications gave me the income to retire, but the passive losses from those LP investments offset my rental income as well as that passive income...a very nice bonus.  Between the two, I've easily saved six figures in taxes.  I couldn't do enough active deals to scale because it simply was too much work.  Syndications changed my life, enabling me to truly Keep More!  

Originally posted by @Holly Williams :

I'm with @Todd Dexheimer  I would do both.  Passive investing in Syndications gave me the income to retire, but the passive losses from those LP investments offset my rental income as well as that passive income...a very nice bonus.  Between the two, I've easily saved six figures in taxes.  I couldn't do enough active deals to scale because it simply was too much work.  Syndications changed my life, enabling me to truly Keep More!  

The benefits of investing. Love your story @Holly Williams!

 

What would you do if you have a decent income W2 but not at the Accredited Investor status? There are almost no high quality syndications being offered to non-accredited investors.

Account Closed

I think the bigger question is: do you have the bandwidth and the desire to be active investor? I mean it is no different from owning a business and will require significant amount of time at least upfront. 

So I'd start with determining that first. Here's an article that should guide you in the right direction: 

https://www.biggerpockets.com/member-blogs/10850/84064-what-type-of-investor-to-be-when-i-grow-up-active-or-passiv

Once you decide that, while I agree with others that you can do both: active and passive, both do require you to get educated first. Do that by concentrating on one strategy at a time, which will keep you focused. 

Best of luck!

Jason,
In order to invest as a non-accredited investor, you need to have pre-existing relationship with the deal sponsors. I suggest you network with the syndicators and investors more actively online and offline to gain more exposure and find the right opportunities for yourself as they do exist, just a bit harder to find.
Best of luck!


Originally posted by @Jason Larson :

What would you do if you have a decent income W2 but not at the Accredited Investor status? There are almost no high quality syndications being offered to non-accredited investors.

 

Originally posted by @Jason Larson :

What would you do if you have a decent income W2 but not at the Accredited Investor status? There are almost no high quality syndications being offered to non-accredited investors.

 You're not looking hard enough, Jason!

Agreed with @Amy Wan . You have capital to do either or both. The decision comes down to what you want to do and how much time you have in the day to do it.

Thank you all s much for the help, I will start looking at Syndicate deals as I would like to start with a passive investment (should also be less capital). I'll also try and look at high growth areas I've lived in before (in different states) as it's hard to manage property there remotely but passive investing should be ok.