How It Works

Real Estate Syndication: Funding Large Scale Investment Properties

Our projects involve arranging financing for large scale, multi-million dollar apartment complexes. We accomplish this through what is known as "real estate syndication". In essence, real estate syndication is the pooling of funds to finance a larger scale real estate investment. The pooling allows investors to achieve collectively what they cannot readily achieve on their own.

Limited Partnerships: What are They and Why are They Effective?

Once we identify a new investment opportunity, we form a legal entity-called a Limited Partnership-to hold the real estate project. Investors then purchase units in the partnership, which are similar to shares in a corporation and simply represent a percentage ownership in the Limited Partnership. A real estate limited partnership is comprised of a general partner and one or more limited partners. The General Partner typically manages the asset on behalf of the partnership. The limited partners, on the other hand, are passive investors who enjoy the benefits of ownership without the hassles of management. The England Group has been using the limited partnership structure for many years, due to the important benefits that are available to investors. These benefits include:

No Geographical Limitations

Participate in strategically located, high quality real estate investments. Each project is structured to provide both short-term and long-term benefits.

Lower Risk Exposure

One of the biggest advantages comes through the pooling of funds. A real estate investor who invests privately is limited to investing in a smaller property where one vacancy can have a large impact. For example, if the investor owns two rental suites and one tenant moves out, he or she is facing a 50% vacancy. The same investor, owning limited partnership unit for an apartment community with 200 suites, faces a 0.5% vacancy increase when one tenant moves out. This group effort limits the individual investor's exposure to risk.

Hassle-Free Ownership

A real estate investor who purchases an income property and manages it himself will have to deal with the various management issues and headaches in order to receive the benefits of ownership. On the other hand, an investor in a real estate limited partnership receives the benefits of ownership, while the General Partner, with its expertise and experience, handles the day-to-day operational issues on behalf of all limited partners.

Limited Liability

Limited partners do not participate in the day-to-day operation or management of the business. Provided there is compliance with the applicable statutory requirements respecting the formation, registration and operation of a limited partnership, limited partners are only liable to the extent of the capital which they have contributed or have agreed to contribute under the partnership agreement.

Favourable Tax Treatment

The limited partnership structure permits tax deductions to flow to investors, which results in a large portion of their equity being returned through personal income tax savings.

In summary, a limited partnership is a relatively simple, time-tested ownership vehicle. Furthermore, the ongoing costs of operating a limited partnership are quite low, as compared to other structures. A successful syndication provides investors with ongoing cash flow, tax savings benefits, as well as long term capital appreciation.