Limited risk? No management responsibilities? Secure and inflation proof benefits of real estate ownership without the investment of time and energy? Let's talk about passive real estate investments.

Limited partnerships are a way to invest in real estate, without incurring any liability beyond the amount of your investment. Investors are able to enjoy appreciation and tax deductions for the total value of the property. You can also buy, build or rehabilitate rental housing projects using other peoples money if you are a developer or landlord. If you are seeking passive real estate investments, or have the ability to do a project and are willing to do the work, but need to raise capital, the concept may be right for you. Limited partnerships were designed to limit investor liability to the amount of their investment, but they also allow the "pass through" of all the property's tax benefits to the investors, and also unlike corporations, their profits are only taxed once. A general partner allows for centralized management and developers can maintain control of their projects while raising equity.

The general and limited partners set the terms of the partnership agreement. the general partner makes day to day operating decisions and the limited partner may only take action if the general partner defaults on the terms of the agreement or is grossly negligent. Ownership is split according to a negotiated formula. Limited partners can buy up to 99 percent ownership of profits/losses and cash flow (excluding fees to the general partner). The general partner retains the 1 percent or more remaining ownership of profits, losses and cash flow (plus any agreed upon fees).The limited and general partners split any profits from sale or refinance of partnership assets. The split generally provides an incentive to the general partners who may receive up to 50 percent of profits.

Specific rights are negotiated between the partners. The general partner typically make day-to-day and development decisions, determines how much cash to distribute to the limited partners versus how much to hold in reserve, and assesses possible sales proposals. The limited partner's are informed of operating conditions, are brought in to approve a sale or refinancing; and can remove the general partner for gross negligence or breach of contract.

The General Partner's Obligations: The general partner must complete the project as proposed, while managing the partnership and the business as agreed upon in the partnership agreement and must typically guarantee any additional funding needed to complete the project (repayable with interest) In addition, the general partner oversees construction, leasing. property management. and maintains the books and records of the partnership. The general partner submits periodic reports to the limited partners on the project's finances and progress, including analyses of the property's sale potential. The general partner may not withdraw without the approval of the limited partner.

Triple Net Leased Commercial Property is leased property that requires the tenant to pay for property taxes, insurance and maintenance in addition to the rent. Security, partially tax sheltered income, predictability with a hedge against inflation – this is a tremendous way to increase your wealth through real estate investing.

This real estate investment product requires little or no management, has little risk, and produces monthly income from lease payments. The lease agreement can also provide the opportunity for rent increases as a hedge against inflation. The leases are typically for a 15 to 25 year term.

In most investment property scenarios, you perform property management duties, pay operating expenses, collect rent, pay all taxes, insurance, maintenance costs, cover the cost of refurbishing and other operating expenses. In triple-net-leases the tenant has agreed to perform these duties for you in return for a long-term lease agreement. The commercial tenant in these situations have a vested interest in seeing that the location is well kept and it is likely that the property will be enhanced over time. All in all, a pain free and lucrative way to invest in real estate

A triple-net leased property can be a candidate for the replacement property in a 1031 exchange. Investors can dispose of labor intensive/management intensive properties like multi-family homes, apartments, etc. and reinvest in management free property that frees up their energy and time for other pursuits.

We hope this information has given you a clearer idea of the real estate investment options open to you. If you have any further questions or would like to discuss strategies that will help you reach your financial goals, let us take you there! Contact us a (404) 477-2044 or email info@lynxre.com.