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- This Is the Easiest Way to Passively Invest in Real Estate, According to Kathy Fettke</p>
<p>Gabriel VitoJuly 13, 2025 at 3:13 AM</p>
<p>MaslovMax / iStock.com</p>
<p>Investing in real estate sounds great until you're dealing with midnight plumbing issues and tenant complaints. But what if you could earn real estate income without ever managing a property?</p>
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<p>According to Kathy Fettke, co-founder of RealWealth, the answer is real estate syndications.</p>
<p>"In a syndication, you are completely passive because somebody else is managing that deal, and in the operating agreement and the PPM, it'll explain who has different duties, and you don't have any. Your only duty is to invest your money," Fettke said in a recent video she posted to her social media.</p>
<p>In other words, you can invest in real estate deals without ever managing the property yourself. Syndications offer a hands-off approach that's growing in popularity among investors looking for passive income, especially those with full-time jobs or other priorities.</p>
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<p>How It Works</p>
<p>Fettke emphasizes that investors in syndications are fully passive.</p>
<p>Because syndications involve raising capital from multiple investors for a shared profit, they're considered securities and must comply with SEC rules, especially when it comes to who can invest and what risks must be disclosed.</p>
<p>As long as the sponsor takes full responsibility for managing the deal and communicates the terms, they can legally raise money from investors.</p>
<p>Here's a typical breakdown of how syndications work:</p>
<p>A sponsor identifies a property and creates a business plan.</p>
<p>They form a legal entity (often an LLC) to acquire the property.</p>
<p>Passive investors contribute capital, typically in the range of $25,000 to $100,000.</p>
<p>Investors receive legal documentation including:</p>
<p>An Operating Agreement, which outlines voting rights and management structure</p>
<p>A Private Placement Memorandum (PPM), which discloses fees, risks and offering terms</p>
<p>Once the deal is fully funded, the general partner manages the property and executes the business plan. Limited partners receive passive income (usually monthly or quarterly distributions) and a share of any profits when the property is sold or refinanced.</p>
<p>"That's why in a syndication, you wanna make sure that the manager of the asset that you're investing in really knows what they're doing, because they're doing all the work," Fettke added.</p>
<p>What To Consider Before You Invest</p>
<p>Syndications offer one of the only ways to invest in real estate truly passively.</p>
<p>Here's how the pros and cons stack up:</p>
<p>Pros</p>
<p>No landlord responsibilities</p>
<p>Monthly or quarterly distributions</p>
<p>Access to large, professionally managed properties</p>
<p>Long-term wealth-building potential</p>
<p>Cons</p>
<p>Illiquid (capital is tied up for years)</p>
<p>Limited control over decisions</p>
<p>Performance depends on the sponsor</p>
<p>Often restricted to accredited investors</p>
<p>What To Watch Out For</p>
<p>Still, passive doesn't mean risk-free. Because you're handing over control, choosing the right sponsor is everything.</p>
<p>Here are key things to evaluate before investing, according to BiggerPockets and the SEC:</p>
<p>Experience: Has the sponsor successfully managed similar deals?</p>
<p>Transparency: Do they provide regular updates and open access to financials?</p>
<p>Fee structure: Common fees include acquisition, asset management, and profit-sharing. These should be disclosed in the PPM.</p>
<p>Risk disclosures: Be wary of "guaranteed" returns or vague projections. Read the fine print.</p>
<p>Most real estate syndications are only available to accredited investors. According to the SEC, this includes people who earn over $200,000 a year or have a net worth of at least $1 million (not including their home). However, some crowdfunding platforms and Regulation A deals may allow non-accredited investors to participate with lower minimum investments.</p>
<p>Syndications can be a powerful passive income strategy, but only if you understand the risks and don't need immediate access to your money.</p>
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<p>This article originally appeared on GOBankingRates.com: This Is the Easiest Way to Passively Invest in Real Estate, According to Kathy Fettke</p>
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