Forging partnerships and owning investment properties can help active investors build wealth, diversify their portfolios, increase their income, and grow their capital.
In multifamily real estate, common partnership structures include general partnerships (GPs), limited partnerships (LPs), and limited liability companies (LLCs). Each offers varying levels of liability protection and active management involvement. [1] LLCs help formalize joint ventures and private placement (syndication) offerings, providing structure and protection to all partners.
Let’s clarify the importance of partnerships for multifamily real estate sponsors to help you identify an institutional-quality partner or sponsor that aligns with your investment journey.
DIRECT OWNERS & PARTNERS
Active investors are individuals or entities directly involved in various aspects of a real estate deal, such as renovation, construction, property management, or acquisition. Two common ways to invest actively in multifamily real estate are direct ownership and joint ventures.
Direct ownership in multifamily real estate is when an individual or company independently buys and manages a multifamily property, such as an apartment building, without partners or outside parties. This gives the individual or company complete control over the property but requires taking on all the risks and responsibilities in every stage of the investment lifecycle, including evaluating the deal, securing financing, taking over operations, maintaining resident relations, managing the investment’s overall performance, and executing the exit strategy.
In short, direct ownership means you’re responsible for everything. It offers autonomy and the potential for greater upside. However, the tradeoff is the volume of work, risk, and complexity involved.
JOINT VENTURE
A joint venture (JV) is a partnership between two or more parties, typically investors, developers, or operators, that pool resources, share financial contributions, and split risks and profits according to the JV partnership agreement. A JV can be a development project or an investment with a significant, physical value-add component. How do joint ventures work with private placements?
For example, in a development deal between sponsors and developers, both parties pool resources and actively participate in the project. The developer handles the construction, design, and execution, while the sponsor raises capital, manages investor relations, and may oversee asset management.
Together, the developer and sponsor share risks, responsibilities, costs (sometimes), and profits based on the terms outlined in the JV agreement. The sponsor may raise capital from passive investors through a private placement vehicle.
These investors contribute capital to the sponsor’s investment entity and then enter the JV with the developer as a single party. Although they provide a portion of the funding, these investors do not have any decision-making ability or responsibilities. [2]
LIMITED & GENERAL PARTNERS
In contrast to direct ownership and JVs, in a private placement structure (sometimes called syndication), the individual or company managing the property or investment typically acts as the general partner (GP).
A general partner is sometimes called a sponsor or owner/operator. As active investors in a multifamily private placement, a general partner (GP) or sponsor plays a crucial role in managing the investment from acquisition to sale, including property management, decision-making, and reporting to investors, while limited partners (LPs) are passive investors. [3]
As Forbes puts it, “The general partner(s) of any real estate deal is the ‘brains’ of the operation. They are the ones driving the deal from inception to completion.” [4]
LPs are the investors who contribute a portion of the capital needed to acquire the property in a deal and receive a share of the cash flow from the property’s monthly rental income, capital appreciation, or both, depending on how it is structured. Then, contingent on the deal structure, they can receive monthly or quarterly income distributions from the asset. [5][6][7] They may also earn a share of the equity upon resale. However, every deal is different. The profit split should be detailed in the private placement memorandum (PPM) before investors decide to join the deal. [6]
Partnerships make sense for both sponsors and passive investors because they offer the opportunity to pool resources to support the significant upfront capital necessary when acquiring an asset, allow access to expertise and an overall more well-rounded team, and provide increased investment potential. [8]
Passive investors’ liability in the LP position is limited to the amount of their investment in the LLC. They do not actively participate in renovation, construction, property management, or acquisition labor. Entering into an investment structure like a private placement where the GP is responsible for the commonly associated risks of investment real estate reduces exposure for passive investors, enabling them to profit from potentially maximized returns. [9]
Diverse expertise when creating a deal can increase a partnership’s buying power. Leveraging the strengths of each partner can also minimize the financial and operational strain of a real estate deal, streamlining productivity and fostering a sense of accountability in the partnership. [10]
WORK WITH BAM CAPITAL FOR MULTIFAMILY REAL ESTATE INVESTING
BAM Capital is a vertically integrated sponsor that 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 risk-free. 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.
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SOURCES:
[1]: Google Generative AI. (2025). “Types of partnerships in multifamily real estate.” https://www.google.com/search?q=types+of+partnerships+in+multifamily+real+estate
[2]: Nuveen. (n.d.). “Tax benefits and implications for REIT investors.” https://www.nuveen.com/global/insights/real-estate/tax-benefits-and-implications-for-reit-investors
[3]: Google Generative AI. (2025). “GPs role in a multifamily real estate investment deal.” https://www.google.com/search?q=GPs+role+in+a+multifamily+real+estate+investment+deal
[4]: Forbes. (2022). “What Do LP And GP Stand For In Real Estate? Learn More About These Essential Roles.” https://www.forbes.com/councils/forbesbusinesscouncil/2022/09/08/what-do-lp-and-gp-stand-for-in-real-estate-learn-more-about-these-essential-roles/
[5]: Forbes. (2022). “A Guide To Investing In Real Estate Syndications.” https://www.forbes.com/sites/forbesbizcouncil/2021/10/26/a-guide-to-investing-in-real-estate-syndications/?sh=379b3e6538cf
[6]: BAM Capital. (2025). “Who owns the property in a syndication?” https://www.bamcapital.com/who-owns-the-property-in-a-syndication/
[7]: Multifamily Refinance. (2023). “Multifamily Syndication: The Complete Guide.” https://multifamilyrefinance.com/apartment-investing-blog/multifamily-syndication#anchor-links
[8]: Google Generative AI. (2025). “Why are partnerships sensible in multifamily real estate?” https://www.google.com/search?q=why+are+partnerships+sensible+in+multifamily+real+estate
[9]: 1031 Crowdfunding. (2024). “Partnering for Success: The Benefits of Real Estate Joint Ventures.” https://www.1031crowdfunding.com/partnering-for-success-the-benefits-of-real-estate-joint-ventures/#:~:text=Joint%20ventures%20also%20allow%20investors,maximizing%20the%20potential%20for%20returns.
[10]: HAR.com. (n.d.). “The Benefits of Partnering with Other Investors in Multifamily Real Estate.” https://www.har.com/blog_114680_the-benefits-of-partnering-with-other-investors-in-multifamily-real-estate#:~:text=Owning%20and%20managing%20multifamily%20properties,increasing%20overall%20efficiency%20and%20productivity.
