CPI Blog

What Syndications are and How They Work

What Syndications are and How They Work

by | Oct 1, 2020

Dear Investor,
It is so important for real estate investors to understand what syndications are and how they work, because they are an amazing wealth building opportunity.

A real estate syndication is when a group of investors pool their money together in order to acquire large real estate assets. The active investors (which can be called the general partner, GP, sponsor, or operator) are in charge of managing the day to day operations of the real estate. The passive investors (or limited partners, or LPs) invest in the asset but have no active involvement in the management of the property.

The benefits of this structure is that it allows passive investors to participate in large, high quality real estate assets without all of the hassles of managing properties themselves. All the work is done by the experienced sponsor team and the passive investors get the returns and passive income.

This allows passive investors to experience the economies of scale of multifamily properties, and diversify into multiple syndications. Large multifamily properties allow for professional onsite management so you don’t have to take on the role of landlord in your spare time. You won’t have to worry about leaky toilets, or tenants calling you at 2am; this gets left to the professionals.

Don’t forget about the tax benefits of being a direct real estate equity investor, along with the fact that private syndications have historically outperformed public real estate investments. All of these benefits reveal why real estate syndications are such a powerful wealth building strategy.

If you would like to learn more about multifamily syndications or get access to these types of investment opportunities, be sure to join our Exclusive Investor Club

– August Biniaz
CEO & Founder, Canadian Passive Investing

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