Syndication and escrow

[Steve S.]

I have a question about investing in a syndicate to purchase a commercial property. The syndicate I am considering investing in raises money by selling shares in an LLC, and the money is used by the LLC to purchase the property with remaining funds used for operating expenses.

My question is why are these funds not sent to escrow? It seems like it would be safer for investors if our money was sent to escrow, and once the shares are sufficiently sold and the LLC fully funded, the property can be purchased with the escrow funds with the remaining funds being transferred to the LLC to cover operating expenses.

Is it common for money for a syndication to flow as I describe above (ie from the investor directly into the LLC)? If this is common, it seems to leave investors more susceptible to fraud, as the LLC managers could conceivably pull the funds out of the LLC and abscond with the money without ever having purchased the property.

Thanks in advance for any insight or guidance that is provided !