Accountant · Middle Tennessee · Member since 2016 · 18 posts · 1 vote
What the pros and cons of investing in partnership or syndications as a limited partner vs buying your own deal? Is being a limited partner complete passive income?
Being LP is pretty dang passive. And lower risk in theory since real estate doesn't go anywhere and can always cash flow regardless of value.
if you find your own deals it takes more of your time and requires more resources like knowing the right people and having capital. But the returns are way better when you own 100%.
@Allan Smith I would love to connect with you! I am looking for a fourplex in the Murfreesboro/Lavergne/Smyrna area and it seems that I may use your services. I can send you my phone number through direct message
One thing I think people need to be cautioned on is the part where you mentioned investing in a partnership as a limited partner. If a partnership is created and one person/group within the partnership has no responsibilities other than to provide capital with a reasonable expectation of a return then the partnership has likely created a security and a syndication should be used. One should run potential investments through the Howey Test if there is any doubt whether or not a security is being created.
For a passive investment the best bet is to invest with a reliable sponsor in a syndication. I think there are more legal protections for both the LP and GP in this in these offerings than in a partnership.
Other than vetting the deal and the deal sponsor and the occasional check-in, a limited partner should be a passive investment.