How promising is syndication really?

[Kole Moore]

Hi there,

I am 21 going to college to be a civil engineer in Washington, once I graduate I plan to use syndication to invest in real estate. What I am scared about is getting burned with syndication, I have seen and heard about people getting large amounts of money taken from them because they did something wrong in the process. How can this be avoided? Is syndicating as useful as some talk about it considering the risk?

[Nathan Gesner]

Let me be brutally honest: why would anyone invest large amounts of money to someone with no track record?

Even if you have been investing for the past three years, that's not really a track record. We've had a growing economy for three years straight and the housing market has been booming for ten years. It's very difficult to fail in real estate at this time.

Even some of the "big" syndicators you see on BP have never been through a difficult market. They tout big numbers, but there's no evidence those numbers will remain true in the future. If I'm handing that kind of money to someone else, I'm looking for someone with a track record of more than ten years that includes the last down-turn.