How to start in syndication?

Question

Hi All,

I'm really interested in learning how people started in syndication and what steps they took to get into the industry. I've listened to a lot of podcasts and it seems most syndicators try to find a mentor or invest as limited partners with the intent of learning how the deals get underwritten and how they are managed. I'm curious if others did similar steps or used other methods to learn the industry?

My goal is to eventually become a syndicator myself but I know that I need a mentor and guidance structuring deals. Any helpful tips is greatly appreciated! Thank you all in advance.

Account Closed · Answer

@Peter Sable Congrats on the pursuit of large multifamily syndications! When we found the RIGHT coach, our success took off. The problem is the multifamily/syndication coaching space is certainly crowded and can be a bit confusing knowing what to look for - at least it was for us. We've been in 2 groups - it took making a mistake on the first one to know what to look for and find the right mentor/coach. Once we did - our success took off.

I'll try to not make this post super long - but here's a few things to look for when vetting a coach:

1. Willing to partner with you in any market as long as they like the deal (without weird rules and restrictions that create a cluster of competition from all students in one market)

2. One-on-One coaching DIRECTLY from the "main" guy/expert - avoid groups with "sub-coaches" (<--these are put in place because they can't handle the volume of new members)..makes you wonder if they're focused on building a coaching empire and making a ton of money from that - OR focused on building a successful real estate portfolio & focusing on the success of their members.

3. Make sure your coaching is coming from someone with 7K - 8K unit portfolio - across multiple markets - and been through a full deal cycle on multiple deals - AND performing/hitting their investor targets. There's a lot of gurus popping up selling coaching and they've only done a few deals. You need a strong backing when doing these deals!

4. Avoid groups with weird rules (must use their buying broker and/or can't talk to brokers directly, can't partner with people outside of their group, nickel and dime you on additional fees, etc)

5. Culture of the group - is it established & maintained? These people will be your partners - make sure integrity, character, etc are required values to join the group - these are your future partners and you want quality. This starts at the top with the leader.  Are they letting anyone in as long as they can write a check and pay for the group? (<--red flag) or do they truly vet people - is there an interview process?

6. Reputation in the industry - with investors (is the portfolio hitting targeted returns), with brokers (are deals closing once under contract), with lenders, etc. Be careful who you learn your underwriting from!

7. How many people in the group are doing deals and getting into General Partnerships? How long does it take to do so? (should be joining a GP within 4 months and doing your own deal of 100+ units in your first deal) Ask about the track record of members

Hope this helps! Trust your gut and intuition...if it feels like a dog & pony show with a lot of flash & money & sales pressure...it's most likely just that. Best of luck on your journey!!

Grigory Pekarsky · Answer

Find a mentor. The best way to get into syndication is through someone already doing it who can teach you the ropes and share knowledge about how they do things, both the good and the bad. When you find a mentor, make sure your skillset matches his or hers, and take an active interest in their business so you can learn from them and be more worthwhile to them in return.

Bernadeau C. · Answer

i am taking the approach that @Brock Mogensen did. i love numbers so i have been underwriting deals and looking to provide that value to other investors who may have stronger skillsets in another areas.

Paul Moore · Answer

@Peter Sable. I agree that you should find a mentor locally or a paid coach anywhere. I had been in real estate investing for well over a decade. When I paid $25,000 for a paid coach, my commercial real estate career and my syndication efforts took off.

@Whitney Sewell had the same experience and he’s crushing it now. You should probably check out his podcast, The Real Estate Syndication Show.  And check out Joe Fairless’s show and books as well.

Happy Investing!

Greg Scott · Answer

I joined a group where they teach how to do syndication and members put together syndications with each other.

Brian Adams · Answer

@Peter Sable my journey in syndication is exactly as you described: "invest as limited partners with the intent of learning how the deals get underwritten and how they are managed."

I now have my own business, bought and sold 5,300 units valued at over $300 million.

My last purchase was a 1,000 unit apartment complex.

More than 10 years ago I also hired a coach.

As Account Closedmentioned, you need to find the right coach or platform as not all will give you what you need.

Rick Martin · Answer

@Peter Sable First, focus heavily on the education piece by reading books, listening to podcasts, joining masterminds, and attending conferences. These last two will grow your network as well and perhaps lead to partnerships. I think you need to spend six months to a year not only getting educated but discovering what your place is within a syndication. What is your proximity to your market? If you live in the market, you could be boots on the ground and focus on acquisitions or asset management. Then you can be the lead sponsor/operator. If you live far away from your market, maybe you have access to capital, and you could help raise funds to close and be a co-sponsor. I would suggest a paid educational program, or even a mentor program if for nothing else, to keep you accountable.

Brock Mogensen · Answer

My journey of getting into syndication started with learning how to underwrite deals.  My approach was learn one piece of the process then partner with other people that were strong in the pieces I lacked.  Coming from an analytical background underwriting made the most sense for me.  Spent 6 months learning everything I could about underwriting syndicated deals, partnered with two other more experienced investors, 6 months later we close on an 89 unit apartment building.  Partnerships are huge in syndication and partnering with people that are strong where you are weak are the best partnerships..IMO

Peter Sable · Answer

Hi Greg,

How did you find that group and what made you choose them over others? Do these groups usually have restrictions on membership/participation? How much did it cost for the educational training? Thank you.

How to start in syndication?

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