The Difference Between a REIT and Multifamily Syndication



A lot of people who want to get started in real estate investing don’t know the best way to do it, and sometimes feel a little overwhelmed by the different options. Many of these people understand the benefits of real estate investing, like stable cash flow and that asset prices tend to appreciate over time, and are eager to get started.


Two of the most popular ways that people invest in multifamily real estate are with REITs and with multifamily sponsors.


In this blog we are going to be discussing exactly what each of these real estate investing options are and we will explain the benefits of each. After reading this blog, you should have a much better idea of which option is better for you.


What is a REIT?


“REIT” stands for real estate investment trust. A real estate investment trust is a company that owns, operates, or finances real estate that produces income. REITs pool the funds of many different investors in order to help finance the purchase and operation of the real estate, similar to syndications.


In other words, REITs are entities that take money from many different investors, sometimes millions, and use the money to buy and operate income-producing real estate. Investors can buy shares of REITs on public stock exchanges.