What You Should Know Before You Invest in a Syndication
You should always know all the details of an investment in the simplest of terms before you commit any dollars. You should know exactly what to expect before you even think about placing your hard-earned money anywhere. Syndication investing is the best option for many looking for passive income and building wealth. We’ve put together a few basic questions you should ask as you consider syndication investing.
What IS Syndication Investing?
Syndication investing refers to a team of experienced people finding and vetting a commercial property for multiple investors. Many investors look to syndications as single-family investment homes can come with some specific and expensive challenges: fluctuating market values, home repairs, inspections, etc. Investing in syndication can offer some security in that a manager is vetting the property, and the group of investors can divide any associated costs.
We’ve published an update covering this topic specifically; read more here
You should plan on doing your own due diligence and vet the details of any investment before you commit any dollars. Your vetting process should go beyond just asking questions. Ask to see relevant documents and make sure you know and understand important details of your investment.
It would be best if you also vetted the manager of the investment. As we are also financial educators, we are accustomed to answering questions from potential investors all the time. We welcome the chance to educate as much as we can. We will always be transparent to our investors and potential clients. A strong word of warning for everyone: if anyone or any organization is reluctant to answer questions, be cautious. Your investment manager should be open and honest at all times.
Details, Details, Details
Again, you should not invest your money without having a complete understanding of all the details. Some essential questions to ask:
- What is the minimum investment?
- What is my projected return? What is the return structure?
- How many investors are there?
- What is the time commitment on my investment?
- Will I be responsible for taxes on this investment?
If you are a first-time investor, make sure you have thought through these details. And while this is not a comprehensive list by any means, the above list does cover some of the basic information you should investigate. There is so much to learn and consider as you find the best place to invest your money. And we can’t stress the importance of doing your homework beforehand.
We strongly believe that syndication investing is a great option. And we also believe in educating our clients about the details involved, too. Please reach out to us – anytime – to discuss your needs and if this specific type of investment is right for you. It’s your money, and we would happy to help you determine the best way to invest.