Partnerships, Syndicates, Real Estate Investment Trusts

Partnerships
Many people find investing with a partner gives them the courage to begin investing. In addition, partnerships can increase the amount of capital available to invest, thus allowing the partnership to invest in higher quality projects than an individual. In some cases, one partner provides the money while the other provides expertise and oversees the management side.


Limited Partnerships
A limited partner is a money only investor who does not participate in decision-making or maintenance of the investment. The general partner takes care of landlord responsibilities. Unlike a general partnership in which a partner is personally liable for the partnerships debts, a limited partner´s liability is limited to his or her investment. The limited partner is not personally liable to unpaid creditors.

Conversely, limited partners cannot utilize any tax loss from their investment; therefore, it´s important that the decision to invest in a limited partnership be based on income or expected appreciation. Limited partnerships have fallen out of favor and there is now less of a market for partnership interests.


Syndicates
A syndicate can be categorized as a group investment. They are usually a limited partnership set up by a general partner. Your decision to participate should be based on the general partner´s track record. If you are interested in this type of investment, it is advisable to seek legal advice as to state regulations and securities laws governing small syndicates.

Real Estate Investment Trusts (REITs)
Much like investing in stocks, REITs allow a small investor to have ownership in multimillion-dollar properties. Shares are listed on the stock exchange and can be purchased through a stock brokerage. Under federal law, REITs must have at least 100 members and at least 95% of the earned income must be distributed to investors each year. Many investors choose REITs because of the large dividends.

Investment Clubs
Many investors get their start in the stock market through an investment club. In it, members put in a specific amount of money and decide, as a group, what to invest in. Real estate investment clubs work the same way with investors purchasing property as a group rather than stocks.