Syndication of real estate is the process of selling or buying a property in order to make money from it. The investor can buy or sell the property at a higher price than what they paid for it. The syndicator receives a percentage of the profits for finding and bringing together buyers or sellers.

Real estate syndication is the process of finding properties that are likely to appreciate in value and then buying them at a discount. After you buy the property, you list it for sale — often with an agent — and sell it at a profit.

Finding real estate syndication deals is easier than you think. You don’t need to be a real estate agent or a Realtor® to do it. All you need is a solid understanding of the market and some basic phone skills.

In a real estate syndication deal, the manager will find potential properties that the group can purchase and manage as rental units or sell as investment properties. The manager will then present those opportunities to investors and take their money in exchange for ownership shares in the overall project.

What is a Real Estate Syndication Deal?

A real estate syndication deal is a pooling of investment capital with other investors to purchase and sell residential or commercial properties. The term “syndication” is used because you’re selling shares of the project, which allows you to raise money from multiple investors.

A real estate syndication deal comes in many different forms, but most deal structures involve a single manager who handles all aspects of the project while the investor funds are pooled together into one account.

What Types of Properties Can Be Syndicated?

Syndicating a property is a way to share the risk and reward of investing in real estate. It’s a popular strategy for large-scale investors who want to invest in real estate but don’t have the capital to do so on their own.

The types of properties that can be syndicated range from single-family homes to multifamily buildings, including apartment buildings and condominiums.

How Does Real Estate Syndication Work?

Real estate syndication is an investment strategy in which multiple investors pool together funds to purchase real estate assets. Each investor makes a small contribution, but as a group they own the asset.

Real estate syndication works by connecting investors with developers who want to build new properties using the funds provided by investors. The developers retain the rights to develop the property and sell it for profit once it’s completed. Investors receive a share of the profits in return for their investment.

Here’s how it works:

A real estate syndicator (also known as a sponsor) buys a property, then sells shares in the ownership of that property to investors. The number of shares an investor gets depends on how much money they contribute.

The investors don’t actually own the property directly, but they have rights to receive payments based on how much they have invested in it. The more shares an investor owns, the more likely they are to receive income from their investment.

The real estate syndicator makes money by charging fees for managing the project, collecting rent payments from tenants and taking a percentage of profits at sale time (when it sells its stake).

How Do You Find Real Estate Syndication Deals?

The first place to look for real estate syndication deals is in your own backyard. If you live in a city with a lot of investors, it’s likely that there are other people who have been looking for deals.

If you don’t know anyone, you can always post on online forums and social media sites that are geared toward real estate investors. These sites will often have forums or groups where you can ask questions about finding deals and getting started with real estate investing.

Another great way to find real estate syndication deals is through local networking groups or clubs. You may be able to find someone who has a property they need to sell quickly, but they don’t want to deal with all the hassles of selling their property themselves.

Finally, you can use some of the same methods that commercial brokers use when they’re trying to find properties for their clients:

Benefits of Real Estate Syndication

There are many benefits to real estate syndication that can help you succeed in your investment goals:

Greater returns and diversification: With a larger pool of investors, you may be able to purchase properties at a lower cost per unit than if you were doing it on your own. This can increase your total returns over time as well as help diversify your portfolio to reduce risk exposure.

Easier access to capital: Syndication can provide much-needed capital for investment opportunities that would otherwise be unavailable due to limited personal wealth or lack thereof. It also reduces risk because it allows you to spread out among multiple properties rather than putting all your eggs in one basket.

Access to professional assistance: When investing in real estate, there are many legal and financial issues that must be addressed before purchasing any property or managing an existing one.

Leverages Your Investment: This is perhaps the main benefit to real estate syndication – taking advantage of other people’s money (OPM). You don’t have to put all your money in one deal but rather spread it out over multiple deals. The more deals you do, the more leverage you’ll have with each individual deal.

Gets Around Bank Lending Constraints: Syndicators often get around bank lending constraints by selling shares in their projects at lower prices than they would otherwise be able to do if they were going through conventional lenders or banks. This also helps them avoid any restrictions on loan-to-value ratios (LTVs).

You save on transaction costs: Transaction costs include fees paid to lawyers, accountants and other professionals who help with the sale or purchase of a property. When you syndicate a property, you pay these fees only once instead of having to pay them each time you sell an individual unit in your building or complex.

Conclusion:

Our real estate syndication process is easy to understand and requires no experience in real estate whatsoever. Get started by contacting us with any questions you may have, or to receive your FREE information package.