Limited partnerships
Limited partnerships that invest in real estate are, by far, the most popular of all partnership offerings. The riskier equity real estate partnerships build new buildings, attract tenants and hope to sell the properties in five to 10 years at a profit.
More conservative equity limited partnerships buy existing buildings on an all-cash basis that are fully leased and hope to increase rents as leases come up for renewal. Some partnerships, called mortgage loan limited partnerships, provide mortgages to property owners instead of owning the buildings. Participating mortgage loan partnerships offer owners an interest rate slightly better than the going rate in return for a piece of a building’s appreciation. The main types of real estate purchased by limited partnerships include apartment buildings, hotels and motels, office buildings, industrial maintenance, warehouse facilities, single-family housing, and shopping centers.