What is real estate syndication, how does it work and why is it such a powerful tool for real estate investing? On this episode, we go into all these essential details so you can fully understand syndication and why it can lead to real success in your investing career. This episode is packed full of free information that can increase your wealth… don’t miss it!
- The SEC protects investors who do business with operators.
- Syndication is a security and a security is a tradable financial instrument.
- You have a managing partner and a limited partner. The former makes all the day-to-day decisions and the later just invests the capital and is not liable for any decisions made for the property.
- A private placement memorandum (PPM) is a legal document provided to prospective investors when entering a deal. This lays out everything about the deal including: risk, operations, payouts and more.
- Typically a syndication team consists of: General partners (sponsors) including the key principal, the loan guarantor, asset manager, investor relations and acquisitions.
- You will find multiple professionals that are in on a deal including the syndication team, property managers, mortgage brokers, real estate attorneys, tax consultants and more.
- The sponsorship team goes out and purchases the asset, executes the business plan and manages the day-to-day of the property. Then they sell it and the return shares are provided to the investors.
- Many times private syndication deals perform better than public real estate offerings for private investors because there are less fees and overheads.
- A syndication deal means you don’t need to manage a property manager and you go into a partnership with expert operators who make all the key decisions and have incentive to produce the biggest return possible for your investment.
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