Does a $5,000 LP check make sense?

A guide to sizing LP positions

In an era of low interest rates, everyone became fascinated with passive income

So much so, that in some conversations that I have with LPs I’ll hear comments like:

• “How can I possibly lose money on this investment? It’s a multifamily property and everyone needs housing!”

• “I need to get out of my 9-5 grind, and the only way out is being an LP so that my money can earn me money”

In my opinion, these views need to change and I’m hoping you’ll agree after reading this.

Today, I’d like to discuss LP check sizing. In particular, what check size is too little.

Crowdfunding has become popular, and it’s common to see LP check sizes at or below $5,000.

The question is, does such a check make sense?