Investing with Syndication company vs. Independently/with Team

[Wade Calvert]

I have been educating myself for the past month (watching webinars, listening to the podcasts, reading articles, attempting to analyze "deals," and research viable markets-I think I've got that part down) and although I know that I won't feel totally confident and I just have to jump in and go for it, I really can't afford to lose money. Listening the these recent podcasts and trying to learn from others' mistakes have been valuable but has also reminded me of the risk factors involved in this career endeavor. So, I started to wonder if investing with an experienced syndication company would be a better bet for me until I maybe have a bit more asset available to me, am more comfortable with the real estate process/market/business/legalities/etc., and then maybe take on an investment property on my own. Is there any reason I shouldn't do this; or is there a stronger reason that I should stick to navigating this out on my own?

[Lee Johnson]

Originally posted by @Wade Calvert:

I have been educating myself for the past month (watching webinars, listening to the podcasts, reading articles, attempting to analyze "deals," and research viable markets-I think I've got that part down) and although I know that I won't feel totally confident and I just have to jump in and go for it, I really can't afford to lose money. Listening the these recent podcasts and trying to learn from others' mistakes have been valuable but has also reminded me of the risk factors involved in this career endeavor. So, I started to wonder if investing with an experienced syndication company would be a better bet for me until I maybe have a bit more asset available to me, am more comfortable with the real estate process/market/business/legalities/etc., and then maybe take on an investment property on my own. Is there any reason I shouldn't do this; or is there a stronger reason that I should stick to navigating this out on my own?

Hello Wade,

About two years ago, I was at a similar crossroads. I had returned to the US after having worked abroad for several years. I took a rehab bootcamp and secured my first flip in than 10 days and successfully completed the renovation in three months, for a very healthy profit. After several flips and a few wholesale deals, I realized that flipping & wholesaling had become another job and just wasn’t for me, so I turned to passive investing via Multifamily syndications. Since 2018, I’ve invested in 14+ Syndications and read just under 100 Private Placement Memorandums (PPM). Reading the PPMs have been critical to my learning, just one small aspect of the business. 

I’m telling you this story because I leaped and just took action. While I’ve been successful, in hindsight, I wish that I had put together a plan of exactly what my objectives were, along with defined key results. This way I could have been more prescriptive in the actions I had taken.

The vehicles for investing in real estate are without bounds. I’ve only touched on three in this short reply. You’re definitely on the right track by reading books and listening to podcast. I advise some caution because listening to too many mediums, leads to confusion, paralysis and inaction.

@Roni E., mentioned “The Best Ever Apartment Syndication Book” by @Joe Fairless. This is an excellent book that goes in-depth about the Multifamily Syndication business. I would also add “How To Legally Raise Private Money” by @Kim Lisa Taylor and “It’s a Whole New Business” by @Gene Trowbridge because raising capital will be critical to your success.

Finally, if your a going down the "Flipping" route, I would suggest a local REIA and Real Estate Rehabbing bootcamp; emphasis on local.

Why? A locally focused REIA and bootcamp, specifically, will provide the "Circle of Trust" needed to successfully complete a rehab. My experience allowed me to have instant access to deals via an established Wholesaler, capital via a Hard Money Lender, a proven and vetted General Contractor, a realtor experienced in working with first-time investors, and last but not least, a mentor in the Bootcamp instructor who personally walked me back off the cliff several times, but has also been an ear to listen and provide guidance. 

Good luck in your investing and I wish you great success in your endeavors.

Lee Johnson | Value Investment Partners