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Real Estate Syndication vs fund

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  • Molar Mechanic Molar Mechanic 
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    This is not to dissimilar from ASingh86’s question.  I’m partner in a few real estate deals, both syndicated and with colleagues.  These all pay their profitsas well as pass through depreciation.  I’ve seen WCI state that he is transitioning more into funds than individual deals when syndicating.  I’ve looked into a few of the syndicated “funds” such as Crowdstreet, etc.  I’m not sure the structure of these nearly as well.  Would these still issue a K1 with depreciated value?

     

    My other question, which I think I know the answer to, is if it’s possible to 1099 from a fund?  I don’t think it is, though it doesn’t seem easy to do it from a syndicated deal either.

    #198054 Reply
    The White Coat Investor The White Coat Investor 
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    Joined: 05/13/2011

    Yes, it is possible to do a 1031 exchange from a fund. You can also do it from a syndicated deal. Yes, both issue K-1s with depreciation benefits.

    The real question in the syndication vs fund issue is whether you want to be involved in choosing the properties in your portfolio. If the answer is yes, go syndication. If the answer is no, go fund. It’s a control thing.

    If you want liquidity and massive diversification, stick with publicly traded REITs, probably the Vanguard fund.

    If you want super control, buy the individual properties all on your own.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #198219 Reply
    Avatar Larry Ragman 
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    Interesting. Can you do an exchange into a fund or syndicated deal?

    I’d be glad to hear the answer is yes. I asked Alan at CityVest and he told me no. I took it as a general no, but that might have just been a particular deal. He is putting together a OZ fund though.

    #198480 Reply
    The White Coat Investor The White Coat Investor 
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    Earnest refinancing bonus

    Interesting. Can you do an exchange into a fund or syndicated deal?

    I’d be glad to hear the answer is yes. I asked Alan at CityVest and he told me no. I took it as a general no, but that might have just been a particular deal. He is putting together a OZ fund though.

    Click to expand…

    Yes. Not every deal though.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #198589 Reply
    Molar Mechanic Molar Mechanic 
    Participant
    Status: Dentist, Small Business Owner
    Posts: 364
    Joined: 10/29/2017

    Thanks for the follow up.  I figured this one had slid down the page and into the abyss.

    The perfect fund would be an evergreen fund, even better one with no distributions that could one day 1031 into a fund that pays distributions.  (Max growth now and minimal tax now, with income later).  The other option would be running these through a self directed IRA, but the fees for that are cost prohibitive for the amount in the IRA, as well as losing my primary rebalancing lever.

    #198613 Reply

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