Real Estate Syndication 101: A Guide for Accredited Investors
GPs and LPs, the capital stack, hold periods, returns and the questions that matter, explained plainly.
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Private real estate for business owners: diversify beyond your company
Most of your net worth may sit in one business. Here's how passive real estate can fit, and how income volatility affects accreditation and timing.
Why it comes up
Why business owners look at private real estate
- Diversifying away from a single concentrated asset: your business.
- Turning business cash flow into passive income streams.
- Planning around large income years or a future sale.
What to watch
Considerations specific to you
- Variable income can affect the two-year income test; the net worth test may be the clearer path.
- Keep enough liquidity for the business; syndication capital is locked up for years.
- Coordinate investments with your CPA in high-income years.
Accreditation
How accreditation usually applies
Most private real estate offerings are limited to accredited investors. Sponsors using Rule 506(c) must verify your status.
- Net worth test: $1 million+, alone or with a spouse or spousal equivalent, excluding your primary residence.
- Income test: $200,000+ individually or $300,000+ jointly in each of the last two years, with the same expected this year.
Summary of SEC rules for education. Confirm your status with your advisor; sponsors may request documentation. See who qualifies.
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Educational content only; not investment, tax or legal advice, or an offer to buy or sell any security.