Reason #4 Real Estate Syndications May Be Right For You
#4 Sharing Returns In Exchange for Less Work is Attractive to You
Fix-and-flips and standard rental property approaches to investing allow 100% of the profits in your pocket. Mostly because they are smaller deals, require plenty of sweat-equity, and often have only one party (you) financing and managing the deal.
Multifamily real estate syndications are completely different as there could be hundreds of individuals involved, thus some profit sharing. Usually, the passive investors get the larger portion of a 70/30 or 80/20 split, with the general partners getting the smaller percentage.
Group investments like this take a “team” or collaboration mentality versus a competitive mindset. The general partners are actively managing the property, making decisions toward renovations, and handling marketing and financial reporting. So, it only makes sense that they are rewarded for their efforts. If profit sharing and the concept of “a rising tide lifts all boats” makes sense to you, you’re in the right place.