To survive this sea change, you must be prepared to answer questions about how you earn money, why you earn what you do, and clearly articulate your value on the buy-side of the equation. Your state may already have buyer-broker compensation agreements in place. Even so, if you are overwhelmed and confused, you are not alone. Even seasoned real estate agents are unsure about what this means for their future in the industry. Americans currently pay nearly $100 billion in real estate commissions each year. Ryan Tomasello (a real estate industry analyst) forecasts two things as a result of the lawsuits: (1) 30% of commissions could go away (about $333 million in commissions) and (2) the industry could see an exodus of about half of all agents. People have spent hours opining on YouTube in attempts to read the tea leaves. Let’s be honest: Nobody really knows how this will all play out. What can you do to prepare? Here are some key actions you can take.
It’s called a “syndication.”
clarifying questions. Each investor gets to decide whether they want in or not. 4. Investors who want to invest use their preferred funding source. Common choices include liquid cash, solo 401ks, and self-directed IRAs. 5. Investors earn regular distributions (quarterly is standard), get annual tax depreciation to offset their passive income, and receive regular updates on progress at the property.
Without getting too deep in the weeds, syndication is how an experienced operator brings in limited partners (LPs) as investors to purchase a commercial property. Passive investors get a slice of ownership, cash flow, equity, and even tax benefits without being involved in active responsibilities.
FUTURE-READY YOUR FINANCES
Here’s how the process usually works:
You should draw one conclusion from all this: You need an unrelated source of income. One that isn’t subject to the whims of a jury, the NAR or the Fed. One that doesn’t require you to handle contractors, tenant calls at 2 a.m., or leaky faucets—you’ve got enough going on. You can invest in real estate without the responsibilities of active management. Invest, sit back, and cash checks. (OK, there’s more to it than that, but at a high level, that’s pretty accurate.)
1. An experienced operating team sifts through properties to identify an opportunity.
That’s it.
2. The commercial property is placed under contract and evaluated based on legal documentation, physical condition, and financials. Qualified
SIX BENEFITS OF PASSIVE INVESTING
As you already know, owning property comes with a lot of responsibilities. But there are also benefits to owning real estate. The good news is that if you passively invest in a commercial property, you get many benefits without the headaches.
opportunities get presented to possible investors (like you)!
3. Investors see a presentation on the property and the business plan and ask
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