Well, real estate limited partnerships have been around forever. They were red hot about 20-30 years ago.
Around 1985 I received a 150+ page prospectus and offer to buy into one that owned two shopping centers. I counted 7 different types of fees the promoter collected. I owned a business in one of the centers, so I knew it very well. No yield was promised to investors but good profits were certainly projected. There were all sorts of rental increases projected too. As a tenant, I thought the projections were laughable. Both centers were just mediocre. The areas were mature. I wondered how much an investor could make after the 7 fees were extracted. I worried that there was no liquidity until the end. I passed on the deal.
Since then, there have been years of inflation and general prosperity. BUT...
One of the two centers became totally vacant; the area became a slum. The other center, the one I have a business in, has been foreclosed. Several major tenants have come and gone. The center now has a good main tenant but it's 20% vacant. Over the years, rents have barely gone up (and not at all in the past 10 years).
The promoter wasn't a crook. But I would have lost all my investment in that partnership.
By the way, I told him I read the prospectus from start to finish. He told me I was the only investor who ever did that in any of his many partnerships.
That experience is one reason I've avoided absentee real estate investment whether in an REIT or partnership. Too many fees. I have owned real estate directly and made good money.
Be careful.
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