Limited Partnership experience

[Reden Dionisio]

Can anyone share their experience on being a passive investor such as LP?

Pros and Cons?

Would you do it again?

[Jim Pfeifer]

I was a full time active investor for a while and owned single and multifamily properties.  I am now a full time passive syndication investor.  As an active investor, I was not a very good asset manager - I hired property managers and struggled to find quality PM's.  Now, I hire full time asset managers in the form or syndicators who handle all aspects of managing my investments.  I have had much more success this way.

Pros to being an LP: You hire an asset manager and you don't have to deal with the daily hassles of property ownership.  If you find the right operators, you will find experts who will be a better asset manager than you can be.  You can diversify more easily into different asset classes and markets - you don't have to be an expert in everything. The investment minimums are lower that what is generally needed to get into active investing so you can further diversify by getting into more deals.

Cons to being an LP: The investments are completely outside of your control - once you invest, you cannot sell or get out of the investment until the GP decides to sell the investment.  These investments come with K-1s in March so you could be in a situation where you have to file an extension on your tax return.  It can be challenging to find quality operators you can trust (this is where a Community or network of like-minded investors can help).  

Those are just some of the pros and cons - if you are going to be an LP investor, I highly recommend you read The Hands Off Investor by @Brian Burke and join a Community where you can learn and share your expertise.

Good luck!