Syndication or REIT – Which is Best for You?

You already know by adding real estate to your portfolio, you can boost your long-term returns and smooth volatility.  Real estate provides steady income, long-term capital appreciation, diversification, inflation protection, all while offering a low correlation to the stock market.  You’d like to get involved, but you really want to avoid the nightmare stories you’ve heard of crazy tenants and 2 A.M. overflowing toilets.

Luckily, you have options to gain exposure without direct involvement.  Traditionally, that’s been through ownership of real estate investment trusts (REITs).  REITs have been around since the 1960’s.  They offer investors real estate exposure through publicly traded companies that operate commercial real estate and return the profits they earn to their shareholders. 

Through the passage of the Jobs Act in 2012, and a later revision in 2015, the foundation was laid to ease securities law and open up new investment opportunities, once only reserved for an exclusive club.  Now, not only are REIT’s available as a passive alternative to owning real estate directly, but also the emergence of crowdfunding and real estate syndications enable smaller investors to participate in the purchase of a single or multiple commercial properties as limited partners. 

With quite a few options available to gain real estate exposure in your portfolio, which investment vehicle is the right choice for you?  Personal finance is just that….personal.  There are some advantages and disadvantages of both REITs and syndications which can help you determine where best to put your money to work.

Type of Asset & Returns

There are two types of REITs:  Mortgage REITs and Equity REITs.  Mortgage REITs purchase mortgage-backed securities and behave more like debt instruments.  Equity REITs actually own physical real estate and are, thereby, more easily comparable to real estate syndications. 

The types of real estate equity REITs own runs the gamut…multifamily, industrial, office space, retail, etc.  One distinction that’s common, though, is that the assets are typically stabilized – meaning they are either newer or recently updated.  They have a stabilized tenant base and don’t have a lot of capital expenses on the horizon.  With that, risk is theoretically lower, and returns follow suit.  Returns will vary based on a company’s performance, but dividend payouts average around 3-4% with 10-12% overall annualized returns over the long-term.

With real estate syndications, investors have more opportunity to participate in the upside, via value-add improvements.  Many syndicators seek assets that have below market rents, have higher vacancies, are dated properties, and have been mismanaged by “mom & pop” owners.  Risk is higher but returns are as well.  Although not as well known as REITs, real estate syndications have been gaining in popularity in recent years.  Currently, preferred returns are in the 6-8% range, depending on the sponsor and asset, with internal rates of return (IRR) in the 15-20%+ range.

Advantage: Syndication.


When you purchase a REIT, you are purchasing shares of a company that owns real estate, not real estate directly.  REIT’s abide by certain regulations:


  1.   75% of their assets must be in real estate, US treasuries or Cash. 
  2.   75% of profits must be sources from rents, mortgage interest or real estate sales. 
  3.   90% of those profits must be paid out to shareholders in the form of dividends. 
  4.   The company must be managed by a board of directors or trustees.

In a private placement syndication, you are investing in a specific property, and become a member of the company, not a shareholder, who owns the asset as a limited partner.  This is a key distinction, allowing you not only to underwrite the management team, but also the specific asset that you are investing in.  This gives you more control over your investment.  You also know that 100% of your money is going towards real estate, versus a REIT, where percentages of your investment could be held in bonds or cash.

Advantage Syndication.


For the reason just discussed, when you invest in one specific asset, you are inherently not diversified (unless you are investing in a syndicated fund).  REITs typically are invested in specific types of properties (ie commercial office, retail, agriculture, etc.), but can offer both diversification through volume, as well as geography.

Achieving diversification with syndications can be difficult, as minimums are typically $25,000 or more. 

Advantage: REIT.


REITs allow anyone with a brokerage account to participate.  There is not a net-worth or income requirement to buy and typically you can purchase as little as $100 worth of shares. 

Many real-estate syndications are only available to “accredited” investors.  There are nuances, but in its simplest definition an accredited investor is one who’s net-worth is greater than $1 million, excluding their primary residence  One may also qualify based on income of $200,000 or more for the last two years ($300,000 combined if married), with the expectation to make at least that much the next year.  While some offers are open, or have limited slots available, for non-accredited investors, finding access to these deals can be more difficult.  Couple that with the aforementioned high minimum investments required to get in the game and many are left on the sidelines. 

Advantage: REIT.

Tax Benefits

REITs are taxed like stocks.  REITs do benefit from depreciation write-offs, but that’s prior to it reaching the investor in the form of dividends.  Unfortunately, the IRS taxes dividends at ordinary income tax rates.  For that reason, REITs perform best through compounding interest in an IRA. 

Investing as a limited partner in a syndication can offer major tax benefits.  A syndication is set up as a pass-through entity.  The business will pass their income to their owners, who then will pay taxes on that income via their personal return.  This income can be sheltered nicely with the power of the depreciation write-off expense.  Many syndicators employ cost segregation studies and bonus depreciation to accelerate the allowable depreciation in the first years of ownership.  This paper loss can be used not only to write-off income from the property owned, but also capital gains incurred by the individual investor from other investments.

Advantage: Syndication.


REITs, having characteristics more similar to stocks, are highly liquid.  A few clicks on your broker’s website can get you in and out of positions. 

Syndications are one of the least liquid investments you can make.  While some deals look to return their investors’ initial capital quickly through a refinance or sale of the asset, it comes down to the general partner’s decision when the best time is to exit the asset, maximizing returns for their investors.  You should go in expecting to lock your money up for 5-10 years. 

Advantage: REIT.

The Relationship

When you invest in Facebook, you don’t get to spend thirty minutes on the phone with Mark Zuckerberg, hearing his direction on where the company is headed and why his shares are being sold at a value.  REITs are similar.  You can read income statements, listen in on quarterly earnings calls, and measure historical returns, but it’s not a personal relationship. 

When you invest with a sponsor of a syndication, you have likely spoken to this person and understand their philosophy and drive.  You can ask specific questions regarding their investments based on what’s important to you.  You may have their cell phone and direct email.  The opportunity to build a long-term, personal relationship exists with a sponsor.  You are only one call away from the individual making the decisions.  Trusting someone with your money is critical to sleeping well at night.

Note that there are platforms that “crowdfund” by bringing together investors to raise money for sponsor’s deals.  The platform does due diligence on the sponsor for you, per se.  By adding this middle-man, you are one step farther from the operator.  You should perform due diligence on both the platform and the operator.  Understand that the platform is charging a fee to the sponsor of the deal, but that fee is likely coming out of your returns. 

Advantage: Syndication.  


There is a lot to consider when deciding between a REIT and a passive syndication, and there is not a one-size fits all answer as to what vehicle is right for you.  You really don’t have to commit to one or the other.  Because REITs trade more like stocks, they can become volatile, and occasionally offer deep discounts to book-value.  For example, at the time of this writing we are battling a pandemic that has decimated retail and office REITs.  A contrarian may want to look at REITs offering discounts to book value, potential earning outsized returns in years to come.

In general, If you have limited funds to put towards real estate, are looking for the most passive option, and want to be able to get out of your investment quickly, REITs are likely your vehicle of choice.

However, if you can commit capital for a longer stretch, have an income and net worth that allows spreading your bets across a number of sponsor’s offerings, then you likely could also benefit from the tax advantages syndications offer, not to mention the upside potential of higher returns.  Isn’t that what we are all after?

Paul Shannon is a full-time active real estate investor, as well as a limited partner in a number of syndications.  Prior to leaving the corporate world, Paul worked for a medical device company, selling capital equipment to surgeons in the operating room.  After completing a few rehabs employing the “BRRRR method”, he saw scalability and more control over how he spent his time, and left to pursue real estate in 2019.  Since then, Paul has completed over a dozen rehabs on both single-family and multifamily properties.  He currently owns over 50 units in Indianapolis and Evansville, IN and is a limited partner in larger apartments and industrial properties across the US. 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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