By Lonnie White
Although there are many ways a real estate syndication can be structured, at People's Industry Investments we prefer to either form an LLC or an LP when organizing our syndications. The decision making process on which entity structure to use all depends on the specifics of the deal. Although different from a legal standpoint, both structures operate similarly and serve to protect both the general and limited partners. Limited liability companies are among the most common structures of a real estate syndication. Limited partnerships are commonly preferred by sophisticated investors for their associated tax benefits and anonymity. Regardless of which legal entity is used though, each syndication is comprised of 2 distinct groups, general partners and limited partners. The general partners, also referred to as the syndicators, managing members, or sponsors, are tasked with orchestrating the investment from inception to completion. The limited partners, also referred to as passive investors, are the individuals or entities investing their capital into the investment project. Limited partners have no active role in the facilitation of the deal; they simply invest in the project in return for a gain on their investment.
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