Multifamily is overall resilient asset class but there are situations where it can lose money. 

One such risk is the possibility of losing money as a result of investing in a poorly performing syndication.

This can occur for a variety of reasons, including mismanagement by the syndicator or unexpected market conditions.

In some cases, the syndicator may not have sufficient experience or resources to effectively manage the property, leading to decreased occupancy rates, higher expenses, and lower overall returns for investors.

Additionally, unforeseen circumstances such as unforeseen major expenses or changes in the local economy could negatively impact the performance of the property.

As a passive investor in a syndication, you are relying on the syndicator to make sound investment decisions and effectively manage the property. It’s important to thoroughly vet the syndicator and their track record before investing to mitigate the risk of poor performance.

Another potential downside to multifamily syndication investing is the lack of liquidity. Unlike stocks or other investments that can be easily bought or sold, syndication investments typically have a longer hold period and may not offer the same level of flexibility.

By thoroughly vetting syndicators and carefully reviewing investment opportunities, passive investors can make informed decisions and minimize their risk exposure.

Understanding the risks, Multifamily still stays a safer investment option!!