WHAT IS REAL ESTATE SYNDICATION?
In my opinion, real estate is the best way to grow wealth. If you want to invest in what the rich do, get involved in real estate — but I'm not talking about just any real estate.
Real estate has been a staple in many successful investment portfolios for decades, and for good reason. It is a limited commodity that has a proven track record of lucrative returns, the offer of diversification, and resilience to economic recessions. One may hold a number of real estate assets from land to single family homes, and even small multifamily homes. One type of asset structure that is often overlooked, is real estate syndication, specifically for RV parks, large multifamily apartments, self-storage facilities and manufactured home parks. The reason behind this may be one of many; limited access, high cost of entry, or the lack of “know how” to name a few.
The biggest reason investors participate in real estate syndication is access to deal flow. Not every investor has the time to search and underwrite hundreds of properties to find a gem to acquire. By getting involved with trusted real estate syndication partners, investors gain access to this deal flow and the ability to invest in high quality real estate without the hassles of property management.
Real estate syndication is an effective way for a syndicator/sponsor and a group of investors to pool their financial and intellectual resources together to invest in properties and projects much bigger than they could afford or manage on their own. Over 90% of large multifamily purchases are made through a syndication.
The parties at the forefront of a syndication deal include the sponsor (also referred to as the general partner, operator, or syndicator), the limited partners (or passive investors) and the property management team. There are plenty of other team members involved that make the deal work behind closed doors, including, but not limited to, a commercial broker, a team of attorneys, CPAs, and lenders.
