How It Works
HOW IT WORKS
What is Real Estate Syndication?
Real estate syndication is a business option worth investigating if you're interested in real estate investing but are unable or unable to handle it all yourself. Investors can profit from owning an investment property (cash flow, appreciation, tax deductions) through real estate syndications without having to deal with the hassle or worry of being a landlord themselves.
Let's start by discussing the fundamentals of real estate syndications. A real estate syndication occurs when several investors pool their money to buy a sizable piece of real estate together. Real estate syndications offer investment options in a variety of real estate assets, including apartments, mobile home parks, land, self-storage facilities, and other real estate assets. But here at BMDS Legacy Investors, we focus on apartment buildings but are open to other assets.
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WHO ARE REAL ESTATE SYNDICATORS
The Real Estate Syndicator
The general partners (GPs), often known as real estate syndicators, are in charge of organizing and managing the real estate syndication. The general partner(s)' main responsibilities would be:
Underwriting the deal.
Finding investors
Completing due diligence
Arranging the financing
Property Management
Negotiating with the seller
Asset management
Building a business plan.
Handling Investor Relations
As you can see, a real estate syndicator manages every aspect of the transaction, including finding the property, setting up the deal, and running the asset after closing. The purpose of the syndicator in a real estate syndication is to carry out the business plan and provide solid returns to the passive investors.
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WHY BECOME A PASSIVE INVESTOR
The Passive Real Estate Investor
In a real estate syndicate, the passive investor's job is to provide a fraction of the money needed to buy the property. Passive investors obtain ownership stakes in the property in return.
Passive investors who own a piece of real estate benefit from equity pay down, appreciation, and real estate tax advantages while also receiving monthly (or quarterly) passive income distributions from the asset and a return on their investment when they sell it.
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CONSTRUCTION STORIES
Project Spotlight
Year Completed:
2035
Client:
Spark Services Developers
Market:
Commercial
WHAT ARE THE BENEFITS
The Benefits Of Real Estate Syndications
Real estate syndication investments have a number of advantages. Here are some below.
Income
Investors can earn monthly or quarterly passive income distributions from their investments
Hassle-Free
Investors can invest in real estate without the hassles of managing tenants or toilets.
Tax Benefits
By owning a piece of the real estate, tax benefits are passed down to investors through their K-1 tax filings.
Appreciation
Like any piece of real estate, the value of the property should gradually increase over time, increasing the return on investment (ROI).
Control
Unlike real estate investment trusts (REITs) or crowdfunding platforms, investors can choose which specific properties they want to invest in.
Diversification
Investors can spread their capital across multiple real estate syndications.
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ABOUT BUILDING
The Legal Structure
In order to invest in multi-family properties (apartment complexes) and student accommodation, BMDS Legacy Investors organizes real estate syndications.
A Limited Liability Company (LLC) is the legal form that BMDS Legacy Investors uses for the organization of every real estate syndication.
The general partners and the limited partners make up the LLC. The LLC owns the property, and because the passive investors hold a portion of the LLC, they also own a portion of the real estate. The debt owed on the property cannot be put against the passive owners individually.
An investment offered today won't be the same LLC as one given in the past because all syndications through BMDS Legacy Investors are distinct LLC's established per property. As a limited partnership, MBCP makes an investment in the property.
Each investor is a limited partner as well. The purpose of arranging the syndication in this way is to shield investors from responsibility beyond their initial commitment and to create a clear entity for management and control of the property.
Our usual 80/20 syndication structure means that BMDS owns 20% of the property and that the remaining 80% is owned by individual investors through a Limited Partnership.