Cash Flow is King: Benefits of Real Estate Syndications

You hear the phrase “Cash is king” quite a bit in the finance world. I don’t agree – whether you are concerned about inflation or not, having your money in cash is not the most efficient use of your capital. I prefer “Cash flow is king”. That is why I buy real assets that produce reliable cash flow. I also prefer to invest passively. This means I am generally not involved in the underlying operations of the investment; rather, I trust a manager to oversee and control the investment.

For the first 25 years of my investing life, I was fully invested in the stock market and mutual funds. It’s funny, but becoming a financial advisor is what finally taught me that there is a better way. In my years as an advisor, I spent a lot of time educating myself on finances, markets and how money works.

What I learned surprised me – not many people build sustainable wealth in the stock market alone. Also, research has shown that the average investor earns returns lower than the market (check out this article by The Balance). There are many reasons for this, but mainly I think the system favors the product providers rather than the product investors. Banks, brokers, advisors, and market makers all make money whether the market goes up or down.

This realization ended my financial advising career and is why I started a community called Left Field Investors to help educate people how to invest passively in real estate syndications. There are a multitude of reasons why I invest in real estate – significant tax benefits, forced appreciation, market appreciation, leverage, principal pay down, and cash flow from operations.

One of the main advantages of investing in real estate is multiple opportunities for reliable cash flow. I usually don’t invest in a deal unless I am confident it will provide me with monthly or quarterly cash distributions within the first six months.

Real Estate Investment Trusts (REITs)

A REIT is a company that owns, and often operates, income-generating real estate. You can see Sure Dividend’s full REIT list here.

REITs are popular with investors because they have some of the benefits of both the stock market and of the real estate market.  Some of the positives of REITs include higher liquidity than owning physical real estate, receiving regular distributions of cash from operations (average 4-5% yield), ease of investing, leverage, and exposure to the real estate asset class. The one benefit you get that is generally not present in stock market investments is you benefit from the leverage the operator might use at the asset level.

The downsides to investing in REITs are similar to stock market investing: exposure to market volatility; no direct control or influence over the asset; comparatively low cash flow; and you do not receive the tax benefits of investing directly in real estate because REITs are taxed as portfolio income.

Real Estate Syndications

Real estate syndications are typically single-asset LLC’s (some are set up as funds) that buy and operate a real estate asset (multifamily apartment buildings, self-storage, commercial/retail properties, and industrial triple net leases are a few common asset classes).

Some of the benefits of investing in a real estate syndication are forced appreciation, market appreciation, significant tax benefits through depreciation, leverage, principal pay down, and cash flow from operations. The key is to invest alongside the syndicators as a passive investor so that you do not have to find or manage the asset.

With real estate, you are not as reliant on the market for your investment returns. You will receive regular cash flow distributions and can benefit from “forced appreciation” later when the asset is refinanced or sold. This type of appreciation means that regardless of the market cycle, the syndicator can make improvements to the property. For multifamily properties, this could be  through unit upgrades, washer/dryer installations, and even dog fences.

Higher rents can be charged because tenants want these upgrades. This, in turn, increases the net operating income (NOI), which directly increases the value of the property. Even if market forces do not allow rent increases to be maximized through forced appreciation, cash flow from these properties will not decrease significantly with a drop in the value of the asset.

Owning real estate through a syndication allows you to earn your share of the depreciation on the property. This type of “paper loss” lowers your taxable income by offsetting gains from cash flow and capital gains from real estate. This is taxed as passive income, which has the lowest tax rate, and any excess losses can be carried forward to future years. One of the best ways to maximize your wealth is through reducing and deferring taxes and owning real estate is one of the best ways to mitigate your tax burden.

Leverage is also a significant benefit of investing in real estate. A typical real estate syndication might finance up to 75% of the purchase price of an asset. That means an asset that is bought for $10 million will only need $2.5 million of cash to purchase the asset. If the operator is able to force appreciation and the asset grows to a value of $12.5 million, the $2.5 million of gain goes 100% to the owners of the equity. The equity owners doubled the value of their investment even though the asset only appreciated 25%.

An additional benefit of a real estate syndication is that the principal on the loan is effectively paid by the tenants in the property. This directly adds to the value of the property and is credited to the account of the equity owners.

Lastly, a real estate syndication typically results in reliable cash flow from operations. It is common to get a preferred return (pref) of 6-8%. The pref is the return the sponsor will pay before they are compensated based on the performance of the project.  If the pref is not met during the hold time of the property, then the pref must be paid out of the sales proceeds before the sponsor receives compensation.

You can also receive cash flow in the form of return of your capital if the property is refinanced once some of the improvements have been done. Return of capital is not a taxable event, so you could receive your entire investment back, still own the asset and continue to receive cash flow from operations. This is called “velocity of money” – you can now use the returned capital to buy a second cash flowing asset.

Now you own two assets and have two separate streams of cash flow all from the same initial outlay. The last way to receive cash flow from the asset is when the asset sells. If there hasn’t been a refinance, you receive your original capital plus any gains.


There are many ways to generate regular cash flow from your investments. My experience has convinced me that investing in real assets that produce reliable cash flow is the more consistent way to build wealth. It is not a “get rich quick” scheme, but if you concentrate on regular cash flow from your assets, you will not be dependent on market appreciation alone for the growth of your portfolio.

One final example – if you had $1,000,000 at retirement, most financial advisors would recommend that you withdraw no more than 4% per year and they would recommend you not touch the principal. You could withdraw $40,000 every year. If you are in the 25% tax bracket, your net would be $30,000 from your $1 million nest egg.

Assuming there isn’t a large market correction early in retirement, you could hope to live on that $30,000 for the rest of your life and leave the $1,000,000 in principal to your estate as you can’t spend it down because you don’t know how long you will live.

In contrast, if you invested the $1 million in real estate syndications, you could reasonably assume you will receive at least 7% in annual cash distributions, so you would be receiving $70,000 annually. Under current tax laws, you would likely not pay any tax because you would have a large depreciation loss. Even though you are taking $70,000 in income, the value of the underlying asset is not decreasing – it is likely appreciating through forced or market (or both!) appreciation.


Over time, the value of your assets will grow as will your cash flow through rent increases, debt refinancing, and asset sales. As with the stock market, there is always the risk that asset prices will decrease, but it is unlikely that the operational cash flows will decrease at the same rate, if at all. It seems like a much safer and more reliable approach to retirement. Cash flow is king, so make sure you are investing in assets that produce income.

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

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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