Real Estate - Real Estate Investment

Investment
in office buildings and apartment houses usually involves such large sums of
money that it is beyond the power of most small investors. Therefore, in recent
years, it has become increasingly popular for small investors to turn to real
estate syndicates. This historical piece offers some great insight into
investing in the 1960s.

A
syndicate is a limited partnership organized to purchase and operate a parcel
of real estate. Partnership shares are usually available in comparatively small
amounts, anywhere from $1,000 to $10,000.

The
properties can be any real estate holdings such as hotels, office buildings,
shopping centers, terminals, or industrial parks. The prime incentive of a
syndicate for small investors is the relatively high rate of income return
coupled with a reasonable safety of principal.

The
fact that most syndicate properties are heavily mortgaged imparts a high degree
of leverage to participants. The leverage factor, or margin buying in realty
investment, means that investors can buy large parcels of properties for
minimum cash outlays. Moreover, most syndicate operations afford important tax
advantages to investors because of their partially tax-free nature.

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