It’s easy to think that lucrative real estate investments are only available to incredibly wealthy people. However, with the invention of REITs and multifamily private placement (syndication), real estate investing is within reach of more than just the top 1%. Accredited investors can invest in commercial and residential real estate. And while investing directly in large real estate deals is still challenging, there are now more ways to get into real estate investing, such as crowdfunding and syndication.
Here, we will focus on real estate syndication: how it works and how investors can find good real estate investment opportunities.
WHAT IS REAL ESTATE SYNDICATION?
Before discussing syndication opportunities and how to find them, let us look at this type of investment and how it works.
Real estate private placement, also called syndication, is an investment opportunity where a sponsor (or syndicator) structures and manages the deal. In syndication, a group of investors who meet specific criteria pool their resources to purchase a single real estate asset or portfolio of assets that are usually too expensive for a single investor to buy. This can be a good way for investors to acquire potentially lucrative real estate properties. [1]
Although different real estate types can be used for syndication, multifamily syndication is often the most popular because multiple residents provide continuous cash flow.
It is worth noting that syndication deals are primarily limited to accredited investors, meaning someone with a net worth that exceeds $1,000,000 or a yearly income of around $200,000 for the last two years. If they have a spouse, they need an annual income of at least $300,000. [2]
BAM Capital, for example, works only with accredited investors.
IS MULTIFAMILY PRIVATE PLACEMENT (SYNDICATION) DIFFERENT FROM CROWDFUNDING REAL ESTATE?
Real estate syndications are often confused with real estate crowdfunding. The latter became popular when the Jumpstart Our Business Startups (JOBS) Act was passed in 2012 and updated in 2016. Title III of the JOBS Act states that non-accredited investors can participate in real estate crowdfunding projects, with a cap on how much capital can be invested within 12 months. [1]
Real estate crowdfunding follows a simple philosophy: if many people invest a small amount, they can quickly raise enough money for ventures otherwise inaccessible to lone investors. It may use social media channels like Facebook, LinkedIn, and X (formerly Twitter) to reach potential investors. This opens up opportunities that may require substantial capital. Crowdfunding allows investors to participate in real estate investments. [3]
While real estate crowdfunding is similar to multifamily syndication, key differences exist. In a syndication deal, a sponsor identifies an investment opportunity and works directly with investors looking to participate. Passive investors provide a portion of the capital, and the syndicator manages the property for the duration of the investment’s lifecycle. On the other hand, crowdfunding platforms often use social media or digital marketing to attract a broader array of investors.
Both investment types allow investors to participate in real estate investing even with a lower investment size.
HOW TO FIND PROFITABLE REAL ESTATE SYNDICATION OPPORTUNITIES
Real estate investors now have more freedom to choose investment opportunities to participate in, whether it’s syndication or crowdfunding. There are plenty of platforms online that investors should explore if they are interested in finding these opportunities. Some platforms cater only to accredited investors, while others work with non-accredited investors.
CrowdStreet, for example, is a platform where investors may find crowdfunding or syndication deals, but they only cater to accredited investors. [1]
Investors are encouraged to do their due diligence regarding various platforms for real estate investment opportunities to find the one that best suits their needs and goals.
Some marketplaces vet investment opportunities before making them available to investors, making them a valuable resource for finding potentially profitable syndication deals. However, using these platforms requires research on the part of the investors. It could be challenging to tell if the deal is “good” or “bad” without a solid understanding of real estate investing.
If you are an accredited investor, you may be interested in working directly with a syndicator with experience structuring syndications. Working with an owner/operator (syndicator) like BAM Capital, with a proven track record for multifamily private placement (syndication), can help you find profitable investment opportunities.
IS REAL ESTATE SYNDICATION A SOUND FINANCIAL INVESTMENT?
For accredited and experienced investors, real estate syndication offers several benefits, making it a potentially lucrative financial investment. It gives investors access to investment opportunities that are usually out of reach. Multifamily properties, for example, are generally more expensive because of their size and number of units. However, through a syndication deal, investors can participate in a multifamily property investment and earn income from the cash flow generated by the property
Investing in multifamily syndication also helps diversify your portfolio, reducing risk by ensuring you don’t have all your eggs in one basket. You can mitigate risk even if other investments perform poorly. Multifamily syndication can be considered a strong investment because multiple residents generate cash flow, and even if a few residents move out, there is still income from the remaining residents. While multifamily syndication can be a strategic investment, it’s not without risks, and profitability is not guaranteed. This is why due diligence is key. [4]
One of the more attractive qualities of real estate syndication is that it is a passive investment, meaning investors don’t have the landlord’s responsibility. The syndicator oversees property management, meaning passive investors in a syndication deal aren’t involved with managing residents, handling emergencies, etc.
Another reason why real estate syndication can be a strong financial investment is because of economies of scale. Large properties typically enjoy lower renovation and property management costs because contractors and service providers often offer discounts per unit if multiple units are in a single property. This cost efficiency can enhance overall profitability.
At the end of the day, a real estate private placement (syndication) deal is only as good as the syndicator running it. Consider working with BAM Capital to find syndication opportunities that can be passive and profitable.
WHY HNW INDIVIDUALS CHOOSE MULTIFAMILY SYNDICATION TO GROW THEIR WEALTH
A high-net-worth (HNW) individual in the financial industry has liquid assets above a certain threshold. Most HNW individuals have at least $1 million in liquid financial assets, and their net worth typically exceeds seven figures. [5] Simply put, these individuals hold substantial financial wealth and resources.
HNW individuals can come from affluent families that have built their wealth across generations, while others have built their wealth through entrepreneurship, high-earning careers, or other successful investments. HNW individuals generally prefer long-term investments over short-term ones. Their goal is to maintain their wealth and grow it even further. They also understand the importance of surviving periodic financial or economic crises. [6]
Real estate syndication may be ideal for HNW individuals because it is a passive investment, and these are typically busy people who do not want to identify and evaluate the physical real estate nor take on the role of landlord. Since the syndicator manages the property on behalf of investors, HNW individuals are freed from managing the property’s day-to-day operations and the physical demands involved. Also, some syndicators specialize in specific markets or asset classes, giving investors more control over the property types. Investors can select the properties they invest in by choosing the right syndicator. This is a significant advantage over real estate investment trusts or REITs, where it is more of a blind fund.
In a syndication deal, the passive investors often earn money from the cash flow and the equity upon resale once the deal is done, depending on the deal structure. The sponsor usually receives fees and/or a percentage of the “distributable cash” left after all the loan obligations and expenses are paid.
Many syndications are structured with a preferred return, meaning investors must get a minimum return before the sponsor can get a share of the cash flow. So, if the preferred return is set at 7%, then any return up to 7% must be distributed first to the investors. This preferred return rate is the threshold. The sponsor would receive a portion of the cash flow upon meeting this threshold. However, different syndication deals may have different ways of splitting distributions after meeting the threshold. [7]
Real estate syndication gives investors the benefits of investing in real estate without the responsibilities that usually go with owning it. It even has a few unique tax benefits.
TAX BENEFITS OF MULTIFAMILY SYNDICATION
Real estate tax deductions are passed on to the investors when they put money into a syndication deal. This creates a tax-advantaged environment where investors can grow their capital over time, potentially deferring significant taxes until the property is sold. In fact, a property can show paper losses for tax purposes because of depreciation and interest payments, even if it is generating a positive cash flow. However, it is important to note that when the property is sold, investors may be subject to capital gains taxes and could face depreciation recapture. Despite this, when you join multifamily syndication, you’ll enjoy the benefits usually afforded to the owner without having to own the real estate yourself.
Passive income through real estate syndication is typically subject to a marginal tax rate based on the investor’s income tax bracket. However, significant portions of the income can be sheltered through deductions such as depreciation and interest payments mentioned above. This can result in a lower effective tax rate since the marginal tax rate is applied to a smaller portion of your passive income rather than the majority of earned income. Each individual’s financial situation is unique, so potential investors should consult their tax advisors to determine how real estate syndications would impact their taxes. [8]
Investors in a syndication deal can even write off a portion of their passive income to account for the natural deterioration of the property. The 2017 Tax Cuts and JOBS Act makes it easier for investors to claim depreciation to front-load the deductions instead of claiming them throughout the property’s lifespan, also known as bonus depreciation. This is beneficial for private placement/syndication investors because they will only hold the property for 5 to 10 years before the sale of the property terminates the syndication.
CONNECT WITH AN INSTITUTIONAL REAL ESTATE OWNER/OPERATOR
Working with a trusted syndicator is important because, as this is a passive investment, they will make all the decisions regarding the investment property.
BAM Capital prioritizes accredited investors who want to enjoy passive income and all the other benefits of multifamily private placement. As the private equity arm of The BAM Companies, BAM Capital has been focusing on buying the most profitable assets and staying disciplined in its investment thesis. BAM Capital’s investment strategy aims to create forced appreciation while mitigating investor risk. To date, the brand has successfully managed over $1.7 billion in assets across ~9,000 apartment units. [9]
Remember that no investment is without risk. Before making financial decisions, consult your investment advisor and schedule a call with a BAM Capital investment team member.
Disclaimer: All investments carry risk, including potential loss of capital. This content is for informational purposes only and is not financial, legal, or investment advice, nor an offer or solicitation to buy or sell any security. Consult an independent advisor for personalized guidance and contact BAM Capital for details on current offerings. BAM Capital and its representatives are not fiduciaries or investment advisors. The information provided is general and may not reflect individual financial goals. Any financial terms, projections, or forward-looking statements contained herein are hypothetical in nature and should not be interpreted as guarantees of future performance or safety. Such statements reflect Bam Capital’s opinion and are subject to market fluctuations, economic conditions, and investment risks. Past performance does not predict future results. BAM Capital and its affiliates do not guarantee the accuracy or completeness of this information. Bam Capital offers investment opportunities under Rule 506(c) of Regulation D exclusively for accredited investors as defined by the SEC. Verification of accredited investor status is required prior to participating in any investment.
© 2025 Bam Capital. All rights reserved.
SOURCES:
[1]: Hudsonpoint Capital. (2020). “How To Find Good Real Estate Syndication Opportunities.” https://hudsonpoint.com/learning-center/blog/how-to-find-good-real-estate-syndication-opportunities/
[2]: Forbes. (2022). “A Guide To Investing In Real Estate Syndications.” https://www.forbes.com/councils/forbesbizcouncil/2021/10/26/a-guide-to-investing-in-real-estate-syndications/
[3]: Investopedia. (2023). “Real Estate Crowdfunding: Meaning, Pros and Cons, Limitations.” https://www.investopedia.com/ask/answers/100214/what-real-estate-crowdfunding.asp
[4]: Think Realty. (2020). “9 Reasons to Invest in Real Estate Syndication.” https://thinkrealty.com/article/9-reasons-invest-real-estate-syndication/
[5]: Investopedia. (2024). “High-Net-Worth Individual (HNWI): Criteria and Example.” https://www.investopedia.com/terms/h/hnwi.asp
[6]: BNP Paribas Wealth Management. (2021). “Key Trends In Investments Strategies Of Families And Their Family Offices.” https://wealthmanagement.bnpparibas/en/insights/news/key-trends-investment-strategies-families-family-offices.html
[7]: The Motley Fool. (2024). “How to Start Investing in Real Estate: The Basics.” https://www.fool.com/investing/stock-market/market-sectors/real-estate-investing/basics/
[8]: Life Bridge Capital. (n.d.). “Real Estate Syndication Tax Benefits.” https://lifebridgecapital.com/2021/03/18/real-estate-syndication-tax-benefits/#:~:text=Syndications%20also%20offer%20many%20tax,and%20greatly%20reduce%20taxes%20owed
[9]: BAM Capital. (n.d.). “Current Portfolio.” https://capital.thebamcompanies.com
