Month: December 2022

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Good and Bad News on Using a Roth IRA to Invest in Real Estate

One of the coolest things about using a Roth IRA for investing in multifamily commercial real estate is that you do not pay any taxes on any gains. This can be especially advantageous if your syndication investments are doubling in value every 5 to 8 years. On the contrary, using a regular self-directed IRA to invest in a syndication allows the investment to grow on a tax-deferred basis, but a Roth IRA can provide the potential for tax-free growth. The downside is that there are certain restrictions regarding taking proceeds (distributions) out of the Roth IRA. Using a Roth IRA for your real estate investments can be ideal, so let’s take a brief look, shall we?

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The Split – 2 Profitable ways to Share in a Project’s Return

When looking at different multifamily opportunities, you need to be aware of the split, or what’s called the promote. In its simplest form, this is the distribution of profits that go to the syndicator/operator, versus the investor (limited partner). An offering will generally specify the percentage of profits and where they go. It is common for 10% to 30% of profits to go to the operator, with the remaining going to the investors, subject to various conditions. Though each deal may be different, the operator usually tries to find the right balance between their abilities and the needs of their investors.

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