How to Use Knowledge of Tax Benefits to Land Investor Money

By on June 26, 2015

Successful real estate investors always want to know how to use investors’ money in their deals.

No matter what type of real estate deals you are involved in, having the ability to raise funds quickly is essential to the success for any investor. With the limited amount of cash that may be available, it is imperative that you stand out from our competitors in your attempt to raise investor money. One way to use tax benefits to help raise funds for your deals is to communicate all the tax benefits that the investors may receive when they invest in your deal.

Next time you are speaking with a potential investor, try out this question:

How would YOU like to use pre-tax money to invest in real estate deals and not pay taxes when you receive your share of cash flow currently?

If you were an investor looking for a place to put your money, would you be interested in hearing more about this kind of a deal? You bet!

Using Investors’ Retirement Funds

As a CPA who works with a lot of real estate investors and syndicators, I know from experience that a large portion of money raised for real estate deals come from investors’ retirement accounts. Knowing how to tap into investors’ retirement money allows you as the investor to help them increase their return on investment. Retirement investing for real estate may be able to help a person to reduce their current tax liability and create tax-deferred growth at the same time.

For the high net worth investors, this benefit alone could mean an additional return on their investment of up to 40% in tax savings! Let’s face it, we all want to work with high net worth investors in our deals, right? These are the type of people who can help fund a large percentage of your deals so that you can spend time on managing your deal rather than managing 100+ investors.

So if you are looking to raise money for your business or real estate deals, make sure you work with a strategic team of advisors to structure your deal to attract the most investors.

The Benefits of Tax Credits

In addition to tax benefits of using retirement money, there are a lot of tax credits out there that could increase the return on investment by either benefiting the property directly or by being passed on to the investors. Some of these benefits may include the energy credits, depreciation benefits, manufacturing credits, and certain revitalization credits. There are also lots of state or city incentives out there that could benefit both you and your investors. So make sure you work with your advisors to take advantage of all the benefits that may be available to you.

As you put together the real estate deal, work with your team of advisors to strategically structure the deal so that it accomplishes the following:

  1. Maximize tax efficiency for you as the syndicator team
  2. Maximize tax efficiency for your investors
  3. Attract a diverse group of investors (i.e. those looking for both long term and short term returns)

Last but not least, communicate all the benefits to prospects and investor clients. Not only will this allow you to stand out from your competition, but it will also help to build a long term relationship with your investors.


As you probably already know, it always pays off to take good care of your investors. Just as you would do whatever it takes to have happy and satisfied customers, you must do the same for your investor clients. The best part of all this is that these tax strategies generally do not require you to use your own money. It’s about using the IRS loopholes to sweeten your deal for both you and the investors.


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