If you've ever thought about passive real estate investing but felt held back by preconceived notions, this podcast episode is a must-listen. Jim Pfeifer addresses some of the most common myths and objections that prevent people from investing in real estate syndications. Did you think you needed a lot of money or experience to get started? Jim provides strategies for how average investors can meet minimum investment requirements through creative means like investment groups.

Here are some power takeaways from today’s conversation:

• Why people have never heard of real estate syndications
• Do you need a lot of money or experience to get started?
• Minimum investment requirements
• Where to find syndication deals or sponsors
• Real estate syndications and taxes
• Investing in alternative assets

Episode Highlights:

[02:54] Reason #1: They've never heard of investing in real estate syndications.

• Most financial advisors are not licensed to offer or receive payment for syndicated real estate deals, which is why they tend to discourage their clients from pursuing such investments. Instead, they prefer traditional investment options that allow them to earn commissions. The mainstream media and advertising industry heavily promote stock market and Wall Street investments, leaving real estate syndications with limited exposure.
• [05:31] Reason #2: They think you need a lot of money or experience to get started. 

Many people think you need a lot of money or experience to invest in real estate syndications because deals typically have high minimum investment requirements, often in the tens of thousands of dollars range. However, Jim explains there are now more accessible options available like investment groups through platforms like Tribevest that allow investors to pool their money together and get involved in deals for as little as $5,000 or $10,000 to lower the barrier to entry.

[07:23] Reason #3: They don't think they have enough money to meet minimum investment requirements. 

Deals commonly have minimums of $25,000, $50,000, or even $100,000. However, Jim notes that by saving up smaller amounts over time, such as $100 per month, or allocating a portion of annual 401k contributions, investors can eventually meet minimums after a year or so. 

[10:51] Reason #4: They don't know where to find syndication deals or sponsors. 

Many people don't know where to find syndication deals and sponsors because this type of investing isn't widely promoted or advertised. However, Jim explains that communities like Left Field Investors have curated lists of sponsor partners on their websites to help connect investors with opportunities. Podcasts, meetups, and educational resources within these groups can also help people learn about and be introduced to reputable sponsors in their areas.

[13:30] Reason #5: They're worried it will complicate their taxes. 

While Jim acknowledges that syndicated deals do require filing a K-1 tax form, he notes that a small amount of additional complexity is worthwhile due to the significant tax savings these investments can provide. With help from a tax professional, the higher costs are usually more than offset by lower tax burdens according to Jim.

[16:55] Reason #6: They don't feel comfortable putting a large sum of money into an alternative investment.

Jim advises that becoming part of an active community is very helpful for gaining confidence. Connecting with others who have successful experience investing in syndicated deals alleviates fears and provides social proof that these opportunities can be good additions to an overall portfolio.

Resources Mentioned:

Avoiding Rookie Errors as a Left Field Investor: 20 Lessons Learned From 14 Years of Passive Investing in Private Syndications by Steve Suh

https://www.leftfieldinvestors.com/6-reasons-why-everyone-is-not-investing-in-real-estate-syndications/

Advertising Partners:

Tribevest

Rise48

Vyzer