Multi-Family and Syndication

[Miles Presha]

I'm working on multi family investing: marketing, connecting w investors, reading everything I can.  A few questions:

How does one transition from newbie multi-family investing to syndication?  Is there a huge difference and /or transition?

What do you recommend as far as unit count for beginners? Duplexes first, or start higher?

How do you work deals outside of your city?  What type of networking or communication is involved?

I've done my first mailing, reading about creative financing, and hope to evaluate smaller deals this week.  Meeting w investors next week.  Am I on track?  Advice?....

[Brian Burke]

@Miles Presha, people always ask about the “secret sauce” to success. Well, in the business of syndicating multifamily real estate (buying with investor’s money) the secret sauce is not to matchmake investor money with deals, it is to “Add Value”. The reason that successful multifamily syndication firms have a strong following of investors is that their investors use the firm for leverage. You would think it’s the other way around, that the syndicator is leveraging the capital of other people’s money to buy real estate. But that’s not it at all.

The investor is leveraging the syndicator’s track record, experience, balance sheet, deal flow, systems and relationships to buy real estate so they don’t have to.  And to do it better than they could on their own.  There is a lot of value in each of those components and even more value to all of them combined.  If you have all of those things already, you’re on your way. But if you don’t, you need to get them.  All of them.  And that means starting small and earning your wings before you start to fly.

This business isn’t about real estate. It’s about financial services, and just like the big Wall Street firms provide the service of financial planning and investment management, real estate syndication is providing a service by providing investment solutions to their clients.  And that service is only successful if it adds value to the client.

Think of it as a restaurant. Anyone can open a restaurant.  But if you don’t know how to cook, and I mean how to cook better than the customers and consistently make excellent food that makes people rave to their friends, the restaurant will fail, as the majority of them do.  So go hit the kitchen, and don’t open the restaurant until you are an iron chef.