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No. of Recommendations: 3
I've partaken in multiple private real estate partnerships.

As AJ pointed out, getting out can be a problem. Also look at management fees and control.
I'm sure you're aware, you won't have any control. However, in many real estate partnerships the controlling partners get 20% of the profit, the remaining 80% is distributed to other partners, in addition the managing partners get management fees from managing both the partnership and the property.

In my younger days I would love to have been the managing partner, not so much (while I am) a non-controlling partner.

Personally, I'm a little concerned they're taking a crows funding approach rather than a REIT or limited partnership. Perhaps it's to bypass regulatory compliance issues. There are probably better ways into the real estate market.
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No. of Recommendations: 6
Has anyone here invested with these companies? I'd be interested to hear any reviews or opinions, especially in the current economic environment.

Haven't invested because when I looked into one of them (sorry, don't remember which one), the terms to get your money back out were onerous. As in, the administrators could decide that you may only be able to get distributions over a period as long as a couple of years, and you may have to wait several months to get your first distribution. Plus the one that I looked into was a partnership that issued a K-1, and I don't want to deal with K-1s in either my taxable account (too many potential state returns to file) or in an IRA (high likelihood of generating more than $1000 in UBTI when you sell, causing the IRA to have to file and pay taxes, even if the partnership doesn't generate that much UBTI annually).

My one piece of advice would be to very carefully read the prospectus.

AJ
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No. of Recommendations: 3
I've partaken in multiple private real estate partnerships.

As AJ pointed out, getting out can be a problem. Also look at management fees and control.
I'm sure you're aware, you won't have any control. However, in many real estate partnerships the controlling partners get 20% of the profit, the remaining 80% is distributed to other partners, in addition the managing partners get management fees from managing both the partnership and the property.

In my younger days I would love to have been the managing partner, not so much (while I am) a non-controlling partner.

Personally, I'm a little concerned they're taking a crows funding approach rather than a REIT or limited partnership. Perhaps it's to bypass regulatory compliance issues. There are probably better ways into the real estate market.
Print the post Back To Top