Passive income, tax breaks, and equity are some reasons to invest in real estate to grow your wealth.

However, investors must remember that even real estate investments come with risks. Investors should choose an investment property that can bring extra monthly income and increase value over time. [1]

One way to mitigate the inherent risks is to choose the right investment property. As the old saying goes, it’s all about location, location, location when it comes to real estate.

How you invest in real estate assets is also essential. You can purchase an apartment building or a commercial real estate property with dozens of units to collect a potential steady income. You can also buy a small, single-family home for monthly rental income. Some investors wait for their property to increase in value before selling it for a larger profit. [1]

There are many strategies to try, but here we will focus on one real estate investment strategy investors could consider: real estate private placement (syndication).

BENEFITS OF REAL ESTATE INVESTING

Real estate investing is attractive to many investors due to its potential to generate substantial returns. For those who are not entirely convinced or those who are worried about the potential pitfalls, here are a few noteworthy benefits of real estate investing.

Many investors invest in real estate because of the steady cash flow. This is particularly true for single-family homes and multifamily properties, which can generate a steady income stream through monthly rent checks.

With a multifamily property, investors don’t have to worry as much about vacancies because more than one unit produces income regularly. Even if one or two units become vacant for a while, you will not be empty-handed. The property will still generate income as you look for new residents. If you have a well-located apartment building with plenty of amenities, vacancies may become less frequent.

Owning and/or investing in real estate is an ideal way to enjoy monthly income for residential or commercial real estate. You can rent this space out to residents. How much you earn mostly depends on the property you put your money into.

Just keep in mind that cash flow is not guaranteed. The same thing can be said about appreciation. No investment is without risk. Investors need to perform their due diligence and research specific properties and neighborhoods to assess their odds of generating a profit. You may also want advice from an experienced real estate attorney to ensure everything is in order. [1]

Whether renting a property or just flipping and reselling a home, real estate is a long-term investment. Depending on your investment strategy, you may have to hold it for several years while waiting for an increase in value. However, this also means you can enjoy an investment property that aims to generate a potentially steady profit. [1]

Even if you plan to resell the property, it will spend some time under your care. This means real estate is not one of the most liquid asset classes, but its benefits are undeniable.

Real estate is also known for its tax advantages. Investing in real estate comes with many tax benefits. For example, several expenses associated with owning an investment property, such as mortgage interest, property management fees, property insurance, ongoing maintenance costs, and property taxes, can be deducted. [1]

Investors who invest in opportunity zones, which are neighborhoods that require investment, may be eligible for specific capital gains tax incentives, depending on the timing and structure of the investment.

Finally, real estate is also strategic for diversifying your investment portfolio. This could protect you in times of economic turmoil. Even if specific public securities are struggling, your investment properties may still increase in value. This could significantly lessen the impact of losses from your other investments. You might even be protected from inflation because when the prices of goods and services rise, home value and rents typically increase, too. [1]

Real estate can be a fulfilling endeavor for many investors because it allows them to control and manage their investment property. Unlike other investment vehicles, where you have little control, real estate gives you more influence over your investment.

There are many different ways to invest in real estate: real estate investment trusts (REITs), residential properties, commercial real estate properties, house flipping, buying land, etc. Research is key if you want to succeed here, just like with any other type of investment. But now, we will focus on a real estate investment that may catch your eye, especially if you are an accredited investor.

REAL ESTATE PRIVATE PLACEMENTS (SYNDICATIONS): HOW DO THEY WORK? 

Multifamily properties differ from single-family real estate properties because they can aim for a steadier cash flow and potential for strong returns. There are multiple units in one property, meaning more residents, more rental income, and more money for you. You don’t have to worry as much about vacancies because, unlike single-family homes, your cash flow will not stop if one resident decides to move out.

However, owning a multifamily property comes with its own set of challenges. For starters, property management is much more challenging when you have a much larger property to handle. This will require more financial and intellectual resources, meaning you must be closely involved with this investment.

Although it generates passive income, directly owning and managing multifamily real estate is a hands-on investment strategy. It is more expensive to maintain the property, and you also have to play the role of landlord, meaning you have to interact with residents, handle emergencies, pay for repairs, collect rent, etc. This can be an overwhelming real estate project. It is especially challenging for non-accredited investors or those without experience with property management. [2]

Another thing to consider is that multifamily properties can be much more expensive than their single-family counterparts. These large properties are also much harder to obtain. So, getting into this real estate business is easier said than done.

However, these problems are mitigated by the real estate private placement, sometimes referred to as syndication, structure. It is, therefore, important for accredited investors to learn how real estate syndication deals work. It is one of the options available when entering the real estate industry. You can invest in a smaller residential apartment building or a bigger commercial property without spending all your money and managing a large real estate project alone. [2]

Real estate private placement, or syndication, occurs when multiple accredited investors pool money to buy a single property or portfolio. This is considered a partnership between several investors. By combining their capital, investors gain access to properties that are otherwise too expensive for a lone investor. 

They could invest in something they could not purchase individually, such as large apartment communities.

A multifamily syndication is a syndication deal that involves any multifamily property. In a syndication investment, a sponsor locates the deal, coordinates the transaction and funding, locates passive investors to participate, and manages the real estate property once everything is in place. [6]

The general partner, also known as the syndicator, serves as the sponsor. Meanwhile, passive investors receive income, equity, or both in real estate in exchange for providing the majority of the funds needed to secure the asset.

This means investors do not have to worry about the property once it sells. They do not have to become the landlord. The sponsor will either manage the property themselves or hire a property management company to manage it on their behalf. Either way, you don’t have to get involved in it, making real estate private placement/syndication a highly passive investment.

The real estate private placement structure can be used for almost any type of real estate project, but multifamily is the most popular for several reasons. Multifamily private placement reduces the chances of vacancies and could bring a more substantial cash flow. Like-minded investors can significantly benefit from pooling their resources and purchasing a multifamily property through syndication.

In a syndication deal, there is always a predetermined exit strategy. Usually, after several years, the multifamily property is sold for a profit. Once this exit strategy is executed, the syndication deal is complete. [2]

WHAT IS AN ACCREDITED INVESTOR? 

We mentioned “accredited investors” because only accredited investors can access most of these syndication deals.

Through Rule 501 of Regulation D of the Securities Act of 1933 (Reg. D), the U.S. Securities and Exchange Commission (SEC) defines an accredited investor as an individual with an annual income of at least $200,000 (or $300,000 for joint income) or a net worth of at least $1 million (for both individual and joint net worth), excluding the value of their primary residence. However, requirements vary depending on whether the benefit is for an individual or a spouse. 

According to the SEC, an accredited investor can also be a general partner, executive officer, or director of the company issuing the unregistered securities. [3]

Limited liability companies (LLCs) with $5 million in assets may also qualify as accredited investors.

The SEC limits access to real estate syndication deals to protect investors. These deals tend to involve significantly larger investments, so participants must be knowledgeable and have a substantial financial safety net in place if their investment does not yield the expected results.

However, some syndication deals are accessible to sophisticated investors—individuals who are not accredited investors but possess sufficient knowledge and experience in real estate syndication and investing. These syndication deals often limit the number of sophisticated investors to ensure that an adequate number of accredited investors also participate.

WHY REAL ESTATE INVESTORS MIGHT TRY PRIVATE PLACEMENT (SYNDICATION) 

As an investor, you have various asset classes to choose from. However, participating in real estate private placement gives you plenty of benefits. You get to join in multifamily real estate investing with a much smaller investment amount than usual. This means you can access properties that are typically out of reach.

Real estate owners/operators (syndicators) do all the work for you, making it a passive investment. If you prefer to be a passive investor, this is a strategic investment opportunity that allows your money to work for you, generating rental income while you relax.

It is similar to a real estate investment trust (REIT), a company that owns or invests in income-producing assets, such as commercial real estate. However, investing in a REIT means investing in the company rather than directly in a property. 

You are simply buying shares in a company. This means you do not own the real estate properties purchased by the REIT. When you invest in REITs, you do not own any underlying real estate. Instead, you own shares in the company that owns those assets. [7]

Real estate private placement can offer passive income, tax advantages, and fewer downsides. With a real estate syndicate, you can form a limited liability company with fellow investors who act as limited partners and share your financial resources to invest in large, profitable properties. [2]

CAN YOU BUILD WEALTH FROM REAL ESTATE PRIVATE PLACEMENT (SYNDICATION)? 

Building wealth is the primary goal for many investors, including those who invest in real estate. With all the benefits of multifamily private placement listed above, it’s easy to see how real estate investors can use it to their advantage.

Private placement is a popular option among investors seeking to build their wealth. After all, the demand for multifamily properties is always there. People need a place to live. Some investors are even overbidding just to get into the game. But you don’t need to do that if participating in a private placement. [4]

Everyone involved earns a share of the cash flow. Investors can also purchase a share of multifamily properties that are too expensive to buy independently. The best part is that they don’t need to manage such a large building independently because the general partner or syndicator will handle it all.

However, investors should keep in mind that this is a process. Building wealth takes time. You may need to participate in multiple deals to make this happen. You could also consider practicing the discipline to reinvest your income. [4]

As a passive investor, you will generate money in the background. You don’t have to worry about property management in a private placement/syndication deal. This means you can spend more time on other wealth-building endeavors. You can put more focus and more money into different real estate assets. You can even try out other asset classes and diversify your portfolio.

You will not get rich overnight, even with multifamily real estate syndication. But with time, discipline, patience, and enough resources, you may eventually build lasting wealth.

The general partner still earns a significant portion due to spending on property management fees and assembling the entire deal. After all, they are responsible for finding the property and structuring the deal.

Usually, the deal has “preferred returns,” meaning the general partner will not earn anything until the property reaches a certain income level. Private placements are structured this way to prioritize investors’ return of capital.

Private placement deals also have a hold period—usually three to ten years—during which investors only receive their share of rent and income. If the goal is to build wealth, investors should be savvy about using their earnings. 

Ideally, they will put it toward another investment. When the property is sold, investors earn their share of the equity, which is split according to the agreed-upon percentage outlined in the operating agreement.

Investing your earnings could gradually build your wealth instead of losing it. This is one way wealthy families build their generational wealth over time.

CONNECT WITH AN INSTITUTIONAL REAL ESTATE OWNER/OPERATOR 

Like other real estate investments, multifamily syndication remains subject to illiquidity due to the long-term nature of these deals, which typically last for years. Accredited investors are somewhat more comfortable with not having access to their funds because of their high net worth and income.

Still, it is essential to work with a trusted owner/operator (syndicator) because, as this is a passive investment, they will make all the decisions regarding the investment property.

BAM Capital partners with 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.

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]: Statista. (2024). “Market share of commercial real estate investments in the United States from 2020 to 2023, by property type.” https://www.statista.com/statistics/789084/share-of-property-investments-usa-by-property-type/#statisticContainer

[2]: Statista. (2024). “American multifamily homes – statistics & facts.” https://www.statista.com/topics/5396/multifamily-homes-in-the-us/#:~:text=Multifamily%20is%20one%20of%20the,buying%20a%20single%2Dfamily%20house. 

[3]: Merriam-Webster Dictionary. (n.d.). “Amenity.” https://www.merriam-webster.com/dictionary/amenities 

[4]: U.S. News & World Report. (2024). “Multifamily and single-family rental housing market trends.” https://realestate.usnews.com/real-estate/articles/multifamily-and-single-family-rental-housing-market-trends 

[5]: CNN. (2023). “What is Maslow’s hierarchy of needs? A psychology theory, explained.” https://www.cnn.com/world/maslows-hierarchy-of-needs-explained-wellness-cec/index.html 

[6]: ADT Security Services. (2018). “Burglary odds across America: What is the likelihood of your home being burglarized?”  https://www.adt.com/burglary-odds-across-america