6 Reasons Why Everyone Is NOT Investing in Real Estate Syndications

Because of my role at Left Field Investors, I speak to a lot of people who are new to syndications, and one of the most common questions I get is “Why isn’t everyone doing this?”  It’s an appropriate question to ask as they hear for the first time that the typical syndication might pay you 8% annually (mostly tax-free) and possibly double your investment in five years or less (also possibly tax-free or tax-deferred).  It sounds too good to be true – especially to most investors who have spent the bulk of their investing career being exposed to the Wall Street marketing machine. Why doesn’t your financial advisor recommend these types of investments?  The main reason is that they don’t get paid if you don’t invest in a Wall Street-sponsored product. Most advisors aren’t financially incentivized to push anything other than the standard Wall Street products so they don’t know about “alternative” investments, they probably don’t understand them, and they don’t expose their clients to them.

The end result is that most people don’t invest like this.  And by “this”, I mean most people don’t invest in real assets that produce real cash flow.  Most people put money into their 401(k)s and hope that it grows to a sizable amount to allow them to retire someday.  Of course, all of that 401(k) money goes into paper assets – stocks, mutual funds and bonds that are sponsored, pushed, and advertised by banks and financial companies. Some people invest outside of their 401(k)s, but they typically stay clear of anything that Wall Street classifies as “alternative” preferring the “safety” of standard paper assets where appreciation is the main way to increase your wealth.  Of course, to lock in the appreciation, you have to sell your asset to someone else for a higher price than you bought it.

Instead, if you own a real asset that produces cash flow you don’t need to constantly worry about the value of the asset because it is producing a return of cash to you on a consistent basis.  Instead of having your wealth invested in paper assets and worrying about the ups and downs of the market, people who invest in syndications collect monthly “mailbox money” while the syndicator works to force the property to appreciate rather than wait for the market to appreciate. How do they force the property to appreciate? The syndicator can improve the property – upgrade units, install washer/dryers, add amenities.  All of this increases rent which increases the value of the property.  This increase in property value is somewhat independent of the broader real estate market – meaning you are not beholden to the “market” to increase the value of your investment.

The end result is that you receive cash flow regularly until the asset is sold after the operator has forced appreciation so the asset sells for significantly more than it was bought for – which means a large chunk of cash in your pocket. 

There are (at least) six reasons why most people don’t invest this way.

Reason #1 – I’ve never heard of syndication investing!

Most people have never heard of passively investing in real estate syndications. Until recently, there was no easy way for ordinary people to access syndication investments as they were only available to the wealthy.  Some changes to SEC rules and tax law in 2012 allowed certain accredited and sophisticated investors to access these deals. Most people still don’t know about these investment opportunities but that is changing as podcasts and communities have become more prevalent and are exposing more and more people to syndications and real estate investing. If you have read this far, you now know there are options beyond Wall Street!

Reason #2 – Real estate investing is only for the rich!

Many people have the mindset that investing in real estate is only accessible to wealthy people. It doesn’t help that the SEC and other regulators use wealth as criteria for investors to qualify for some investments, but it just isn’t true that you need to be wealthy to invest in real estate.  There are many crowdfunding platforms that give access to investments in many different real estate asset classes, and there are syndication sponsors that accept investors with no income or net worth minimum requirements.  Anyone can invest in syndications!

Reason #3 – I don’t have enough money to meet the minimum investment requirements!

It is true that syndication minimums are high – often $25,000 or even $100,000.  These investments are also extremely illiquid, so not only do you need a large chunk of cash, you also need to be confident you won’t need that cash back for 5 years or longer.  What do you do if you don’t have $25,000? Find some friends and invest together! There are many ways to do that – my favorite is Tribevest (full disclosure, I am an investor in the company).  They have a platform that helps you get a group together, form an LLC, get a business banking account, and start saving money for your first investment.  I am in five investment groups through Tribevest including one where each member contributed only $100 per month and we invested in our first deal last year. Investing with friends and family can reduce the minimum investment amount!

Reason #4 – I don’t know where to find syndicators or deals or even where to start!

This is an understandable fear – if you want to know where to go to buy paper assets, you just turn on the TV and an advertisement will tell you exactly what to do.  That isn’t the case for syndications – it takes a bit more effort, but the good news is there are a lot of great places to find information and start learning.  My bias might be seeping in, but Left Field Investors is a great place to start! There are plenty of other communities that help new and experienced investors.  These groups host virtual meetings and produce podcasts, blogs and other educational materials.  Many of these groups are free while some have both free and subscription areas of their websites.  The bottom line is there is plenty of information out there and plenty of people willing to help you get started.   Do some research and join a Community!

Reason #5 – I’ve heard this will complicate my taxes!

Your taxes will certainly be different if you invest in syndications, but it is also likely that you will pay less in taxes.  The tax code is written to incentivize certain behaviors and there are some nice tax benefits to investing in real estate.  Most of the income you receive will be offset by depreciation, so much of the tax you would owe from cash flow on your investments will be deferred.  Avoiding tax (legally) is one of the fastest ways to build wealth, with tax deferral being a close second. Instead of a 1099 that reports your Wall Street gains and losses, you will get a K1 that will show your gains and losses.  The nice thing about syndications is that gains will go in your pocket and the losses will offset those gains. Use some of your tax savings to hire an accountant!

Reason #6 – I don’t have the guts to put my hard-earned money into “alternative” investments!

I know, the last time you did something “alternative” you ended up with a tattoo and a nose ring. You may or may not have regretted that decision, but I bet it got you some exposure to new people with different ideas.  Tattoos and nose rings are not alternative anymore and neither are real estate syndications! At the risk of sounding repetitive, just as a community can help you find new investments, it can also help you overcome your fear of doing something different. Joining a community will expose you to people who are already doing it and they can help you through the fear of making a syndication investment.  If you spend some time in a Community, you will meet people who you may come to know, like and trust and that could be the basis for getting comfortable with your first syndication investment! Be brave and join a Community!

Make the change with the help of some new friends!

Making any change in life is difficult – it’s usually easier just to continue doing what you have always done.  I was a Wall Street paper asset investor for 25 years before I found real estate and a better way. I spent some time actively investing in real estate buying rental properties and apartment buildings, but when I found syndications, I found a way to be a professional investor by leveraging the operational expertise of others.  I used to check my brokerage statements daily or weekly – watching them go up and down with the whims of the market.  Now, I don’t pay much attention to the value of my assets – I pay attention to the cash that the assets generate.  It’s a much less stressful way to accumulate wealth, not to mention it accelerates the wealth accumulation process.  So what’s the best way to get started on this journey? Join a Community with like-minded individuals who you know, like, and trust.  I recommend Left Field Investors, but any Community will help get you started!

Jim Pfeifer is one of the founders of Left Field Investors.  He is a full time investor living in Dublin, OH.  He has invested in over 30 passive syndications in his quest to become financially free through the acquisition of real assets that produce real cash flow.  You can connect with him at jim@leftfieldinvestors.com.

Nothing on this website should be considered financial advice. Investing involves risks which you assume. It is your duty to do your own due diligence. Read all documents and agreements before signing or investing in anything. It is your duty to consult with your own legal, financial and tax advisors regarding any investment.

Chris Franckhauser

Vice President of Strategy & Growth, Advisory Partner

Chris Franckhauser, Vice President of Strategy & Growth, Advisory Partner for Left Field Investors, has been involved in real estate since 2008. He started with one single-family fix and flip, and he was hooked. He then scaled, completing five more over a brief period. While he enjoyed the journey and the financial tailwinds that came with each completed project, being an active investor with a W2 at the time, became too much to manage with a young and growing family. Seeing this was not easily scalable or sustainable long term, he searched for alternative ideas on where to invest. He explored other passive income streams but kept coming back to his two passions; real estate and time with his family. He discovered syndications after reconnecting with a former colleague and LFI Founder. He joined Left Field Investors in 2023 and has quickly immersed himself into the community and as a key member of our team.  

Chris earned a B.S. from The Ohio State University. After years in healthcare technology and medical devices, from startups to Fortune 15 companies, Chris shifted his efforts to consulting and owning a small apparel business when he is not working with LFI (Left Field Investors) or on his personal passive investments. A few years ago, Chris and his family left the cold life in Ohio for lake life in the Carolinas. Chris lives in Tega Cay, South Carolina with his wife and two kids. In his free time, he enjoys exploring all the things the Carolinas offer, from the beaches to the mountains and everywhere in between, volunteering at the school, coaching his kids’ sports teams and cheering on the Buckeyes from afar.  

Chris knows investing is a team sport. Being a strategic thinker and analytical by nature, the ability to collaborate with like-minded individuals in the Left Field Community and other communities is invaluable.  

Jim Pfeifer

President, Chief Executive Officer, Founder

Jim Pfeifer is one of the founders of Left Field Investors and the host of the Passive Investing from Left Field podcast. Left Field Investors is a group dedicated to educating and assisting like-minded investors negotiate the nuances of the passive investing landscape and world of syndications. Jim is a former financial advisor who became frustrated with the one-path-fits-all approach of the standard financial services industry. Jim now concentrates on investing in real assets that produce cash flow and is committed to sharing his knowledge with others who are interested in learning a different way to grow wealth.

Jim not only advises and helps people get started in passive real estate syndications, he also invests alongside them in small groups to allow for diversification among multiple investments and syndication sponsors. Jim believes the most important factor in a successful syndication is finding a sponsor that he knows, likes and trusts.

He has invested in over 100 passive syndications including apartments, mobile homes, self-storage, private lending and notes, ATM’s, commercial and industrial triple net leases, assisted living facilities and international coffee farms and cacao producers. Jim is constantly looking for new investment ideas that match his philosophy of real assets producing cash flow as well as looking for new sponsors with whom he can build quality, long-term relationships. Jim earned a degree in Finance & Marketing from the University of Oregon and a Master’s in Business Education from The Ohio State University. He has worked as a reinsurance underwriter, high school finance teacher, financial advisor and now works exclusively as a full-time passive investor. Jim lives in Dublin, Ohio with his wife, three kids and two dogs. In his free time, he loves to ski, play Ultimate frisbee and cheer on the Buckeyes.

Jim earned a degree in Finance & Marketing from the University of Oregon and a Master’s in Business Education from The Ohio State University. He has worked as a reinsurance underwriter, high school finance teacher, financial advisor and now works exclusively as a full-time passive investor. Jim lives in Dublin, Ohio with his wife, three kids and two dogs. In his free time, he loves to ski, play Ultimate frisbee and cheer on the Buckeyes.

Chad Ackerman

Chief Operating Officer, Founder

Chad is the Founder & Chief Operating Officer of Left Field Investors and the host of the LFI Spotlight podcast. Chad was in banking most of his career with a focus on data analytics, but in March of 2023 he left his W2 to become LFI’s second full time employee.

Chad always had a passion for real estate, so his analytics skills translated well into the deal analyzer side of the business. Through his training, education and networking Chad was able to align his passive investing to compliment his involvement with LFI while allowing him to grow his wealth and take steps towards financial freedom. He has appreciated the help he’s received from others along his journey which is why he is excited to host the LFI Spotlight podcast and share the experience of other investors and industry experts to assist those that are looking for education for their own journey.

Chad has a Bachelor’s Degree in Business with a Minor in Real Estate from the University of Cincinnati. He is working to educate his two teenagers in the passive investing world. In his spare time he likes to golf, kayak, and check out the local brewery scene.

Ryan Steig

Chief Financial Officer, Founder

Ryan Stieg started down the path of passive investing like many of us did, after he picked up a little purple book called Rich Dad, Poor Dad. The problem was that he did that in college and didn’t take action to start investing passively until many years later when that itch to invest passively crept back up.

Ryan became an accidental landlord after moving from Phoenix back to Montana in 2007, a rental he kept until 2016 when he started investing more intentionally. Since 2016, Ryan has focused (or should we say lack thereof) on all different kinds of investing, always returning to real estate and business as his mainstay. Ryan has a small portfolio of one-to-three-unit rentals across four different markets in the US. He has also invested in over fifty real estate syndication investments individually or with an investment group or tribe. Working to diversify in multiple asset classes, Ryan invests in multi-family, note funds, NNN industrial, retail, office, self-storage, online businesses, start-ups, and several other asset classes that further cement his self-diagnosis of “shiny object syndrome”.

However, with all of those reaches over the years, Ryan still believes in the long-term success and tenets of passive, cash-flow-focused investing with proven syndicators and shared knowledge in investing.

When he’s not working with LFI or on his personal passive investments, he recently opened a new Club Pilates franchise studio after an insurance career. Outside of that, he can be found with his wife watching whatever sport one of their two boys is involved in during that particular season.

Steve Suh

Chief Content Officer, Founder

Steve Suh, one of the founders of Left Field Investors and its Chief Content Officer, has been involved with real estate and alternative assets since 2005. Like many, he saw his net worth plummet during the two major stock market crashes in the early 2000s. Since then, he vowed to find other ways to invest his money. Reading Rich Dad, Poor Dad gave Steve the impetus to learn about real estate investing. He first became a landlord after purchasing his office condo. He then invested passively as a limited partner in oil and gas drilling syndications but quickly learned the importance of scrutinizing sponsors when he stopped getting returns after only a few months. Steve came back to real estate by buying a few small residential rentals. Seeing that this was not easily scalable, he searched for alternative ideas. After listening to hundreds of podcasts and attending numerous real estate investing meetings, he determined that passively investing in real estate syndications was the best avenue to get great, risk-adjusted returns. He has invested in dozens of syndications involving apartment buildings, self-storage facilities, resort properties, ATMs, Bitcoin mining funds, car washes, a coffee farm, and even a Broadway show.

When Steve is not vetting commercial real estate syndications in the evenings, he is stomping out eye diseases and improving vision during the day as an ophthalmologist. He enjoys playing in his tennis and pickleball leagues and rooting for his Buckeyes and Steelers football teams. In the past several years, he took up running and has completed three full marathons, including the New York City Marathon. He is always on a quest to find great pizza, BBQ brisket, and bourbon. He enjoys traveling with his wife and their three adult kids. They usually go on a medical mission trip once a year to southern Mexico to provide eye surgeries and glasses to the residents. Steve has enjoyed being a part of Left Field Investors to help others learn about the merits of passive, real asset investments.

Sean Donnelly

Chief Culture Officer, Founder

Sean holds a W2 job in the finance sector and began his real estate investing journey shortly after earning his MBA. Unfortunately, it could not have begun at a worse time … anyone remember 2007 … but even the recession provided worthy lessons. Sean stayed in the game continuing to find his place, progressing from flipping to owning single and multi-family rentals to now funding opportunities through syndications. While Sean is still heavily invested in the equities market and holds a small portfolio of rentals, he strongly believes passive investing is the best way to offset the cyclical nature of traditional investment vehicles as well as avoid the headaches of direct property ownership. Through consistent cash flow, long term yield and available tax benefits, the diversification offered with passive investing brings a welcomed balance to an otherwise turbulent investing scheme. What Sean likes most about the syndication space is that the investment opportunities are not “one size fits all” and the community of investors genuinely want to help.

He earned a B.S. in Finance from Iowa State University in 1995 and a MBA from Otterbein University in 2007. Sean has lived in eight states but has called Ohio home for the last 20+.  When not attending his children’s various school/sporting events, Sean can be found running, golfing, shooting or fly-fishing.

Patrick Wills

Chief Information Officer, Advisory Partner

An active real estate investor since 2017, Patrick Wills’ investing journey began like many others – after reading the “purple book” by Robert Kiyosaki. Patrick started with single family rentals, and while they performed well, he quickly realized their inability to scale efficiently while remaining passive. He discovered syndications via podcasts and local meetups and never looked back. He joined Left Field Investors in 2022 as a member and has quickly become an integral part of the team as Vice President of Technology.

An I.T. Systems Engineer by trade, he experienced the limitations of traditional Wall Street investing firsthand in his career and knew there had to be a better way to truly have financial freedom.

Unfortunately, that better way is inaccessible to those who need it most. His mission is to make alternative investments accessible to everyone who seeks to take control of their financial future and to pursue their passions in life.

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