A longtime construction engineer, Ghusalal Patel is now focused on the New York City real estate sector. In addition to managing a range of commercial, residential, and industrial properties, Ghusalal Patel assists real estate investors with the formation of limited partnerships.
Real estate has been a preferred mode of investment for centuries. Now, with the real estate market on an extended upswing in the United States, it has become an attractive proposition for many new investors. However, investing in real estate presents a number of difficulties, including the day-to-day management, upkeep, and other administrative duties that come with property ownership. Investors interested in getting into the real estate market and avoiding many of these headaches might consider joining a real estate limited partnership. This legal entity brings together investors and property managers under a single organization for the purpose of investing in real estate.
A real estate limited partnership includes the general partner, typically a property management company or development firm, and limited partners, which are usually investors who provide capital for real estate purchases. In exchange for their capital, these limited partners receive a share of ownership in the properties purchases. In addition to this limited ownership, the risk for limited partners is minimized. For example, if the properties lose value, limited partners are typically only liable for the amount of money they invested in the partnership.
While limited partnerships provide several benefits for investors, there are some downsides to consider. For example, money invested in property through a limited partnership is often tied up for years, making it a relatively illiquid form of investment. Additionally, most limited partners have very little say in the properties being purchased with their funds.
