RG 017 – What is Real Estate Syndication? Part 1: Introduction
This is a three part series devoted to understanding real estate syndication and how to use it to scale your business.
In case you missed it, here are some of the highlights from Ep 17: Syndication Basics Part 1– Introduction to Syndication Investing!
Nuts and Bolts:
Syndication Basics Part 1– Introduction to Syndication Investing
- What is syndication? Pooling investor’s money together to increase the buying power of the group as a whole.
- Syndication offers a place for money to invest & it’s a financing tool for a business, in our case real estate.
- Syndication is the ultimate leverage opportunity for investors and business owners.
- The power of Syndication: It uses other people’s money (OPM) to grow a business.
- Who is involved?
- Syndicator; the person who finds the cracking deals, they oversee everything of the deal and the operation of the property;
- Investors: They bring money to the deal (down payment)
- Equity Partner/Broker: Someone who can connect investors with the deal usually for a fee;
- Syndication Process:
- Find the deal – Syndicator;
- Create the syndication: legal paperwork;
- Raise the money: Find the investors;
- Investors fund the deal;
- Close on the deal;
- Structuring the deal? Equity is split 70/30 (investors/syndicator). Investors will be limited partners and the syndicator will be the general partner.
- Risks? Same risk involved with any real estate deal, it’s the syndicator’s job to mitigate those risks.
- Biggest mistakes:
- Buying a mediocre deal!
- Buying a deal that is too big to close on;
- Lack of time to raise capital;
- Lack of investment strategy;
- How to raise money from investors?
- Pitch deck
- Host investor meetings
- Network, Network, Network
Want to learn more? Email me directly firstname.lastname@example.org
Ready, Aim, Fire!