What is a Silent Real Estate Investor

by staffwriter on September 27, 2010

Silent Real Estate Investor is a partner in a partnership firm, who has already invested money into a real estate property but does not become involved with managing that property. So he is a silent partner in that firm. He is commonly interested in properties like restaurants, rental buildings and other property that necessitate maintenance and management. Being the part of an investment group seeking properties to purchase before selling, superficially maintained and managed to the heights of extreme attraction will certainly raise the value of the property. The investment may also be diversified to other portfolios. The other partners make a successful real estate investment by managing the firm efficiently and all of the partners harvest the results and the silent partner also gets his portion of profit. If the information to the public on the existence of one partner is found harmful to the goodwill of the firm, he may be compelled to be a silent partner. Thus he is just like a banker, allowing loan to the business firm entitled to receive profit or incur loss. The banker receives interest. The rates of return may be more aggressive than a customary bank, while the real estate transactions are smart to investors. As the real estate business is not found so lucrative in the post global economic crisis time, it is not so advisable to be such a partner for this specialization. The behavior of the active partners has to check in different intervals so as to ensure that the discrepancies do not exist in the organization.

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