Private Lending vs Syndication - looking into both

[Bob Willis]

Hey All,

I am thinking about moving out of the direct management of my rental units and moving into other real estate options. I am looking at a few things but recently have looked at Private Lending vs buying into syndication deals.

With Private Lending I believe the returns would be better, but the effort would be more (finding the deals, managing the deals, etc). With syndication the returns would more likely be less, but the effort would be much more passive.

Any private lenders or syndication investors care to share their experience. Have you done both, which you prefer, etc...

Thanks,
Bob

[Taylor L.]

A few things I haven't liked about lending include the concentration of risk and the high tax rate. Both strategies have risks, but with syndication my feel is that there's much more opportunity to diversify your money and optimize for taxes. 1031s, for example, are possible with syndications if structured properly. You'll also hear people talk about cost segregation & depreciation, which are great, but not everyone is in a position where they can maximize the benefits of depreciation.

Also bear in mind that it doesn't need to be either-or. You can do both.