There are several ways to passively invest in apartments, including through syndication or a real estate investments. In a syndication, a group of investors pool their money together to invest in a property. The syndication is typically led by a General Partner/Sponsor, who is responsible for managing the investment and maximizing returns for investors.
Passive investors can use their own cash to invest in real estate deals, including apartments. This can be done through a private syndication.
Self-Directed IRAs (SDIRA):
are retirement accounts that allow investors to invest in a variety of alternative assets, including real estate. Investors can use their SDIRAs to invest in apartments or other real estate assets and may be able to take advantage of tax benefits associated with investing through an IRA.
An option for passive investors to find available funds to invest in a real estate syndication. This approach involves taking out a home equity loan or home equity line of credit (HELOC) as well as doing a refinance on a home loan to access funds that can be used for investment purposes.
A 1031 exchange allows investors to defer paying capital gains taxes on the sale of an investment property, provided the proceeds from the sale are reinvested in a similar “like-kind” property within a certain timeframe. Completing a 1031 exchange, investors can sell a property they own and use the proceeds to invest in a real estate syndication, while deferring taxes on the sale until a later date.
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