Company Structure syndicate & non-syndicate multifamily investing

[Sam K.]

I am a new investor planning to scale my real-estate investments starting with multi-family syndicate deals, where I will get fixed income and venture into single/multi-family homes (through loans) in the future. What would be a good company structure to start this journey? The properties will be in Texas DFW Metroplex. I am researching about Wyoming LLC, owning my Texas LLC, which owns the properties OR owning them in a personal name ...

What should be the ideal structure and what can be the simple structure to get started.

PS: My syndication investments are focused on cost aggregation and bonus depreciation

[Taylor L.]

While most passive syndication investors choose to invest in their own names, those who want to invest with a corporate structure almost always choose LLCs. The main benefit you'd get is additional privacy. LP investors are already shielded from liability, and their risk is limited to their original investment.

It is important to bear in mind that equity investments generally do not pay a fixed income. Sponsors can generally suspend distributions if they deem it in the best interest of their investors and the business. Important to bear that in mind.

The term you're looking for is cost segregation. Many sponsors are doing cost seg studies and passing appreciation to investors. Be sure to review the legal docs and discuss with the sponsors if that's your goal!