When investing in real estate through a sponsor like Falcon Capital, a key decision is whether to commit money to a commingled fund or to invest in individual syndication deals as a limited partner (LP). Both routes allow you to put your capital to work in real estate, but they differ in structure, diversification, and control.
Investing via a Fund:
A real estate fund is a pooled investment vehicle. Investors (LPs) contribute capital, and the sponsor (Falcon Capital, as the general partner or manager) uses that pool to acquire and manage a portfolio of multiple properties. One benefit of this approach is diversification: your investment is spread across all the properties the fund owns. If one asset underperforms, others can help offset it. Funds also offer a hands-off experience. You commit capital and the fund’s managers handle deal selection, due diligence, and management. The trade-off is “blind pool risk” – you may not know every specific property the fund will buy, trusting instead in the sponsor’s strategy and track record. Funds also tend to have defined timelines (e.g., a 5-7 year closed fund or an ongoing open fund), and you’re committing your money for that period. (Typically, a fund will call or deploy your capital gradually as it acquires assets, rather than all at once.)
Investing as an Individual LP (Single Deal):
This means investing directly into one particular property or project. For example, you might choose to invest in a specific apartment complex Falcon Capital is purchasing. The advantage here is control and selectivity – you decide deal by deal, choosing those that fit your interests or goals. You also know exactly what property you’re investing in each time. The downside is that it requires more engagement on your part to review each opportunity, and your money is tied to the success of that single project. Building a diversified portfolio is up to you (for instance, investing in multiple individual deals across different markets or asset types). Each individual syndication is usually illiquid until the property is sold; you can’t pull your money out at will or until an exit event occurs.
Choosing the Right Path
Many investors use both strategies – for instance, placing some funds in a Falcon Capital fund for broad exposure, while also joining a couple of individual deals that particularly interest them. If you prefer convenience and automatic diversification, a fund investment may suit you best. If you enjoy evaluating opportunities and tailoring your portfolio, direct deal investments give you that flexibility. Falcon Capital offers both options and can discuss which approach (or blend of both) aligns best with your objectives, ensuring you understand the trade-offs and benefits of each route.