Based on your results from our Real Estate Investor Quiz, we believe Funds and Syndications may be the right investment options for you.

Passive investing in real estate is a great way to reap the benefits of owning property without all of the headaches that actively managing your properties can entail. Because you’re an accredited investor with at least $100,000 to invest, funds and syndications will be most optimal.

Funds

A real estate fund is a type of passive investing that involves pooling different projects and raising funds from investors.  An easy way to see a fund is as separate investments into different syndications.  Because not every project will perform the same, funds are generally diversified to offset risk. 

Learn more about how real estate investing funds work in this Investopedia article.

One advantage of investing in a real estate fund over directly buying a rental property is that funds generally offer more diversification. Unlike a single property, funds can purchase a variety of asset classes over a wide geographic area. Funds are also not tied to a single investing strategy. Learn more about diversification in this video, and subscribe to our YouTube channel for more content.

Pros and Cons of Funds

Funds are a type of passive investing that don’t require any work on the part of the investor. However, there are some tradeoffs to this type of investment.

Pros of Funds:

Cons of Funds:

Syndications

In a syndication, a General Partner (GP) is responsible for picking out a real estate project and doing all of the necessary work to complete the project.  These are big-scale projects, such as purchasing an apartment building and creating value-add. 

The majority of the cash for the project comes from Limited Partners (LPs).  They write the check but don’t have to guarantee the loan or manage the project. 

At the end of the project, everyone gets their capital back in additional to the proration of the profit.  Because they have less responsibility, LPs get paid less than the GP. Learn more about how investors get paid in both syndications and funds in this article.

Pros and Cons of Syndications

Syndications are a type of passive investing that don’t require any work on the part of the investor. However, there are some tradeoffs to this type of investment.

Pros of Syndications

Cons of Syndications

What’s Next?

Learn more about funds in this Ironton Capital webinar.

Want to see how to unlock your home’s equity so you can invest in funds or syndications? Our Property Llama software will allow you to run different scenarios to figure out the best way to build your portfolio. Sign up for your free account to get started.