You may be wondering how much is typically needed to get into one of these syndications. The answer varies. There is no set number for syndications because every syndication is different. On average, however, one can expect to contribute around $50,000 to $100,000. For some, this could be seen as a downside because not everyone has this amount to put toward a real estate syndication. Still, this amount is not unreasonable for real estate syndications and is easier than producing the total amount of capital needed for this level of investment. Some say that if you’re looking to invest in large real estate projects
but don’t have the funds to get a project started on your own, real estate syndications can be a great way to get your foot in the door. Arguably one of the biggest downsides, is you cannot leverage your credit to get into one of these types of investments. For example, with a fix-and-flip, a lender can provide a loan to help out with the project, meaning you can begin doing deals with as little as $10,000 to $30,000. GETTING INVOLVED USING SELF-DIRECTED IRAS This is where Self-Directed IRAs come into play. Although
some people may have larger amounts of personal cash available for investments, other Americans simply don’t have extra personal money in the amounts needed to get involved in real estate syndications. So, where do you have that type of capital? The answer is your retirement accounts, like a Self-Directed IRA. On average, people have more money in old 401ks or IRAs than they do in their personal checking accounts. Custodians like Quest Trust Company allow individuals to use those funds and invest in all the same deals you would already be considering.
28 :: INVESTOR REVIEW :: MAR-APR 2023
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