Deal syndication with investor payoff

[Ian Dunross]

Hi everyone,

Glad i found bigger pockets. This is my first post and it's nice to meet everyone!

I'm in the process of putting together a syndicate to invest in a 10 unit building. I'm still deciding if i want to syndicate the entire purchase price or just the down payment..

Anyway, I'm trying to think of a way to start the deal by syndicating but payoff the other members of the syndicate so 10-20 years down the road i own all of the equity in the property. 

Is it common to amortize a syndicate over time so they receive a great payoff but don't end up owning the property? Any advice would be appreciated!

[Tito Burgos]

If it's a value add, I would choose the path of syndicating the down payment, initial reserves and upgrade cost.  You can increase the rents and hold for 3 or 4 years and refinance, hopefully you would have built up enough equity to pay the partners off in the refi and now you would be the sole owner with a mortgage.  You may need to wait more the 4 years for the numbers to work out but you won't lock your investors money for 10+ years making the incentive to invest with you more attractive.