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).
Investor · Front Royal, VA · Member since 2013 · 586 posts · 418 votes
7y
@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.
Rental Property Investor · New York City · Member since 2014 · 208 posts · 271 votes
7y
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!
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!
Investor · Minneapolis, MN · Member since 2017 · 12 posts · 11 votes
7y
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.
Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
7y
@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:
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.
Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
7y
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!
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.
Rental Property Investor · New York City · Member since 2014 · 208 posts · 271 votes
7y
@Jason Larson that is not entirely true. 506B syndications can often accept a certain number of “sophisticated” investors. Ping me offline and I’m happy to discuss.
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.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
7y
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.