Overcoming Your Fear Of Passive Real Estate Syndication Investing

Investing in real estate passively is not for everyone. There are some folks out there who are ready to jump right in with both feet without thinking twice. There are also people who will take years before they ever invest or ultimately do not invest at all. What is the right approach though? Learn about the reasons you should invest in real estate syndications.

If you do enough research into real estate syndications, you will discover that there are various reasons why you should not invest in one (at least right now). If you find yourself not wishing to invest passively for one of those reasons, you are probably correct. The best thing you can do is refrain from investing. However, the reality is that many of us don’t have a compelling reason not to invest.

What Is Real Estate Syndication?

Real estate syndication is a popular way for investors to gain access to real estate investments. When investing passively in a real estate syndication, you’re not actually buying the property or managing the property yourself. Instead, you are purchasing shares in a larger pool of properties that are managed by an experienced investor.

How To Overcome Uncertainty When Investing Passively In A Real Estate Syndication

While some investors may shy away from real estate syndications due to the potential risks involved (such as unexpected expenses or vacancy), there are ways to mitigate these concerns when investing passively in a real estate syndication:

• Finding a Reliable Passive Real Estate Investment Sponsor: Invest with a trustworthy buddy. Great advice, I know, but it’s easier said than done. If you don’t have a rolodex of pals, perform a simple internet search, chat to friends who might be investing in real estate with someone they know, or attend meetup groups, conferences, and other networking events with real estate investors.
 
• Fear of Not Having Enough Money – “What If I Lose My Money Investing In Passive Real Estate?”: In general, investing entails the risk of losing money. If losing money is your greatest worry, investing in general may not be for you. Before you invest, you should accept the fact. Because of the numerous capital preservation components and multiple ways real estate rewards you, you are unlikely to lose money, if not break even.
 
• Fear Of Market Uncertainty – “How do you feel about the current real estate market situation?”: If you’ve discovered a reliable syndication team, they’ve undoubtedly already examined [fill in the blank] market conditions. Whether it’s particularly high inflation, real estate cycle phases, predicted interest rate changes, future valuations, or any other market change, it’ll be factored into their deal analysis.
 
• “I Don’t Know What Will Happen In My Life” – Fear Of Time Horizons And Life Changes: If investing is difficult to anticipate, your life is considerably more difficult. Marriage, children, a sick parent, or a work move are all things that could happen in the next 5-10 years that you would never imagine today. It’s enough to make your head spin just thinking on it. Investing now will help you secure financial security and a comfortable retirement in the future. If you’re more concerned about “what if I need that money” than you are about securing your financial future, investing (at least in real estate) may not be the best option for you.

Conclusion

The truth is that there will always be something that could happen in the future that will require you to have some extra cash to weather the storm. A better strategy is to set up a rainy-day fund so you can rest easy knowing you won’t need the money you’ve put aside. Interested in learning more about multifamily apartment investing & real estate syndication? Give us a call or check out some of the other free resources we have available at https://appleswaygroup.com/