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What Is a Limited Partner?

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A Limited Partner is an investor that invests in property syndications. An asset syndication is a partnership between multiple investors who combine their capital, resources and skillsets to purchase and manage an asset class they otherwise could not afford individually. With apartment syndication, the investment property is a multi-family apartment building or apartment complex. 

Many different roles play a part in property syndication. Firstly, the Sponsor, also called a General Partner, makes the property syndication happen. The Sponsor or (GP) puts in the work to find the apartment building, negotiate the deal logistics, finds investors, then manages and oversee the apartment syndication process beginning to end. A Property Management Team, which is either part of the Sponsor’s company or an outsourced 3rd party, takes care of the day-to-day activities related to the operation of the property, including the maintenance and upkeep of the building, any renovations or upgrades, as well as leasing activities.

Limited Partners are the passive investors who contribute their capital to purchasing the target property. In return for their investment, Limited Partners receive an equity share in the syndication along with cash flow distributions and profits. Cash flow distribution refers to the money earned by the apartment building or complex from rental income, and which is distributed to the Limited Partners during the period that the syndication owns and operates the property.

At the end of the holding period, the Limited Partner also shares in the profits from the sale of the property if it has appreciated in value. Every syndication project has a goal that it seeks to achieve during the holding period. The goal is usually a combination of maximizing the cash flow generated from the property through improved lease management and improving the property to increase its value.

* Investing Involves Risk, Including Loss Of Principal. Past Performance Does Not Guarantee Or Indicate Future Results. Any Historical Returns, Expected Returns, Or Probability Projections May Not Reflect Actual Future Performance. While The Data We Use From Third Parties Is Believed To Be Reliable, We Cannot Ensure The Accuracy Or Completeness Of Data Provided By Investors Or Other Third Parties. Neither Eden Capital Nor Any Of Its Affiliates Provide Tax Advice And Do Not Represent In Any Manner That The Outcomes Described Herein Will Result In Any Particular Tax Consequence. Prospective Investors Should Consult With A Tax Or Legal Adviser Before Making Any Investment Decision.
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