Structuring considerations, tax planning implications and financing alternatives are important determinations that require careful analysis in any real estate investment. Do you have it right based on your objectives?
Structuring real estate investments may take many forms and each form of ownership comes with advantages and risks that you should consider before breaking ground on any real estate project. Whether the purchase of a real estate investment is structured personally, corporately, in a partnership or in an alternative form, each real estate acquisition should be assessed on its own merits based on the underlying objectives of the ownership group. Typically, making an assumption that an approach that worked for a previous project is not optimal in all circumstances.
As you start planning new projects, it’s a good idea to take a step back and assess the structuring alternatives that meet your business needs.
Real estate acquisition and subsequent development typically bring together developers, investors and landowners, as well as financing intermediaries. Each of these stakeholders come into a project with their own unique business goals. For each party involved in the development, the optimal tax result might vary and could take different forms depending on the ownership structure that is chosen. Each structure has financial, tax and legal implications, which are worth reviewing
before getting started.
Even if you’ve been involved in successful developments in the past, the structure previously used doesn’t necessarily represent a blueprint for future ventures.