How Attorneys & Lawyers Earn Passive Income by Investing in Real Estate Syndication

by bampublishing | Jan 25, 2022 | BAM Blog, Multifamily Syndication, Real Estate Investing | 0 comments

Many lawyers wonder if they should invest in real estate, and the answer is that it depends on your financial needs. But, for most lawyers, the answer would be yes, considering that real estate offers numerous tax advantages and helps investors generate passive income. A lot of wealthy people in the United States have a core investment in real estate. Lawyers can use real estate investment to make their money work for them.

Another reason to pursue real estate if you are an attorney is because it gives you financial security. With the ability to build wealth through passive income, lawyers can feel at ease and not have to worry about job instability or job insecurity. They are less likely to feel burned out, which also helps their mental health. They could focus on working within their law firm.

The problem is that plenty of lawyers do not know where to begin when it comes to real estate investing. This is especially true for those who just recently passed the bar exam and just now looking into professional development.

While there are traditional methods like investing in the stock market, there’s an even better method of investment that works great for lawyers. Here we will be talking about multifamily real estate syndication for lawyers.

Multifamily Real Estate Syndication for Lawyers

As a whole, lawyers are busy professionals. This means they do not have as much time to get actively involved in real estate investing. It doesn’t necessarily mean that they couldn’t participate in this type of investment—they are just better off with a different approach.

A passive investment is a great fit for people in the legal industry, including lawyers and attorneys, because they are not looking for an extra job. Their primary goal is to have their money work for them without having to exert as much effort as they are already putting into their day job. [1]

Attorneys can get into real estate in many different ways, just as there are multiple career paths for attorneys and many different types of lawyers. They may try Real Estate Investment Trusts or REITs, individual real estate, and crowd-funding or syndication.

Multifamily syndication is the best type of real estate investment for lawyers because it is passive, and it also allows investors to purchase properties that they normally wouldn’t be able to afford on their own.

Multifamily properties are duplexes, triplexes, condominiums, and other real estate properties that have more than one unit within a single building. Because tenants pay rent on a regular basis, they tend to generate a continuous cash flow for investors.

Generally speaking, multifamily properties are more expensive than other real estate investments. This is where syndication comes in.

In multifamily syndication, investors pool their resources together to purchase a single multifamily asset. A sponsor, also known as a syndicator, puts the deal together. They will look for an existing commercial or multifamily property—or sometimes even vacant land for development—and then locate investors to participate in the deal. Investors earn from the cash flow as well as the equity upon resale. [2]

The sponsor’s job consists of finding a suitable property and putting the deal together. Once they have located suitable private investors, the sponsor will also take charge of managing the property on behalf of the investors.

This is one of the biggest benefits of multifamily syndication. Investors do not have to worry about taking on the responsibilities of being a landlord. The syndicator will manage the asset for them. Some syndicators hire a third party organization for property management. The sponsor typically receives fees and/or a percentage of the “distributable cash” left after all the expenses and loan obligations have been paid. The syndicator also makes sure that the payment arrangements are understood by each investor. [3]

As a lawyer, this takes a lot of weight off your shoulders. You can invest your money and enjoy the passive income without worrying about tenants, emergencies, and other responsibilities that typically go with real estate investing. You also do not need to worry about hourly rates or being entirely dependent on your attorneys fee or your law firm.

Passive Real Estate Income for Lawyers

This is one type of real estate investing that attorneys should learn about. The beauty of multifamily syndication is that investors get to enjoy the benefits that are usually afforded to the actual owner. This includes tax benefits and appreciation. Most income coming from multifamily syndication has tax benefits (always consult a tax professional), particularly when they are offset by depreciation. This means syndication can serve as a form of tax shelter. Investors get a check either on a monthly or a quarterly basis for the duration of the deal. [1]

Lawyers who pursue this type of real estate investing can achieve time freedom. With the help of passive income, you will even be able to decide just how much you want to work. Developing alternative income streams may feel empowering for attorneys because they can decide how to spend their time.

Some lawyers have the goal of making money while they sleep. Through multifamily syndication, this may be possible. Multifamily real estate is one of the best ways to achieve this goal because the investors themselves do not have to put in a lot of effort. The investment can grow even without much action on the part of the lawyers.

With the help of a syndicator, a public defender can enjoy a passive investment along with the time freedom that comes with it.

Less Headache for Real Estate Investors: Choose Multifamily Syndication

Multifamily syndication is a form of group investment. It can help even beginner investors reach their goal of owning a multifamily property. While normally a multifamily asset worth more than $3 million is not feasible for most investors to purchase, it can be done through a syndication deal. This is also more realistic—not to mention safer—than purchasing the real estate property on your own. [2]

The sponsor or the syndicator—in this case, BAM Capital—will handle things like finding the right investment property for the multifamily syndication and looking for investors to complete the deal. Property management will be done by a third party or by the sponsor itself. This means lawyers who want to invest in multifamily real estate don’t have to take on any additional responsibilities that normally come with owning this type of investment property.

Try multifamily syndication today so you have more sources of income beyond your attorneys fee and hourly rates.

Why Work with BAM Capital for Multifamily Syndication

For attorneys who want to try multifamily syndication, BAM Capital is the best option because of its vertical integration model that mitigates risk for investors.

BAM Capital prioritizes Class A multifamily properties because it values low-risk investments for passive investors. It also has a strong Midwest focus, prioritizing Class A, A-, and B++ multifamily real estate properties in that area. [4]

BAM Capital will arrange the syndication deal so there is no need to purchase an asset on your own. BAM Capital will also handle property management.

BAM Capital works with accredited investors and negotiates the purchasing and financing of high-quality multifamily real estate properties on their behalf. This Indianapolis-based company currently has over $700M AUM and 5,000+ units. Schedule a call with BAM Capital and invest today.