<== Site of the Week for 2011-12-16 ==>
Investment Property Colorado
Investment Property Colorado is a site about real estate investment in Boulder.
The video below introduces the concept of Real Estate Syndication. Syndication is a system in which a group of buyers pool together the money to buy in a property.
Let's say you wanted to invest $50,000 in Boulder real estate, you could join a syndicate that buys a given piece of property and your investment will go up or down with that piece of property.
I really like this way of financing real estate because the investors will have a direct equity stake in the property. I think the syndication paradigm would be better for our economy than the mortgage paradigm.
A mortgage is a margin play. With a mortgage one takes a fixed interest loan against a property which varies in value. As recent economic events show, people develop a false sense of security at the top of the business cycle and take out loans. They then get crunched at the bottom of business cycles when properties drop below the loan against the property.