The LPs have only ever received one distribution because the GP team wisely held further distributions because they realized that when the rate caps expire, we are going to have a huge cost to by new rate caps or possibly a cash in refinance. 

Or there can be being a GP in a syndication, where you have, effectively, no money down: source $3mm deal, commit $50k with your LPs, collect 3% acq fee ($90k) without ever funding your $50k... you pocket $40k, and have a $50k interest in the deal. 

Quote from @Henry Clark: LPs the point of the previous questions is all of us fail.  

If this seems like an avenue you're interested in there's a PassivePockets conference in Columbus this May, it can be hard to find syndication conferences that is geared toward LPs (the passive investors) aren't actually just a sales funnel for one particular group 3.

What you'll find is that the better sponsors are likely to have a lower return to LPs because they present less risk and are rightfully keeping more of the profits for themselves. 

I'd like to know how the recent tax reforms affect passive LP investors in a syndication deal structured as an LLC with the LPs as owners of LLC membership units.  

You are correct that if you have silent partners (LPs), you would need to set up a syndication.  

I think a lot of new LPs look at fees a bit too much where at the end of the day its LP returns in your pocket.

The returns that investors require is generally based on their perceived risk of the project and the investment period.With my CFO clients who do real estate development, most LPs in the small-scale residential space (SFR & 2-4 MF) are investing for 3-5 years and are looking for a preferred return of 8% with an IRR of 16%-18% for turn-key and 18%-24% for value add.

Plenty of MF LPS being wiped out monthly these days.. what we see on BP with folks is just a small smattering.. and many of the MF deals the GPs are just kicking the can down the road with the cash calls and in another few years they to will lose the proejcts.