This episode is all about real estate investing and the difference between syndications and funds.
Key points:
- Syndication: A pool of investors coming together to buy a specific real estate property. Investors are actively involved in decision making.
- Fund: A legal structure that allows investors to participate in real estate investments passively. There are different types of funds, including Reg D funds (common ones are Reg D 506 B and Reg D A).
- Blind pool fund: A fund where investors don't know the specific assets that will be purchased. Investors are giving the fund manager the latitude to invest based on their investment thesis.
- Feeder fund: A special purpose vehicle set up to invest in another fund.
- Fund of funds: A fund that invests in other funds
Patrick mentions the benefits of blind pool funds for investors:
- Diversification: Investors can gain exposure to a variety of assets through a single fund.
- Faster investment: Fund managers can move quickly to buy assets without needing approval from investors for each purchase.
- Potential for higher returns: Because the fund manager has more flexibility, there's a chance of getting better deals.
If this episode gave you language you’ve been missing, please rate and review the show so more high-capacity humans can find it.
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