Syndication Basics, Case Studies, Books

[Brandon Laughridge]

Hello! Long time lurker, first time poster here.

I'm extremely interested in the syndication model for acquiring multifamily properties because my business partner and I are pretty adept at networking and raising capital (raised north of a million $ for our various businesses over the last couple of years).

However, there's lots of garbage out there related to syndication and it's tough to find any good resources. I wanted to ask two things:

1) Would someone be kind enough to give me the basic outline of how a syndication could be structured? I realize that's like asking "Tell me how businesses work" or something equally as general but a few scenarios would be glorious :D.

For example: We find a 30 unit building for $800k, want to do $200k in renovations, and assume it will be worth $1.5mm after words. Assuming all equity is raised from investors, how does a GP generate fees on that, what would our equity split be typically, etc.

2) What reputable resources would you recommend to learn more on syndication? Books, membership sites, people to reach out to, etc. would be amazing.

Thanks a ton!

[Bradley Glaves]

Bryan seems right on here.

You need to be very careful with syndication and soliciting funds. Because of Bernie, the SEC is getting a bit tighter...and since the big firms all have their lobbyist that keep the SEC at bay, they are going after smaller fish (even though their resources are stretched to the limits).

Make sure you understand the rules of the game and the various sizes of funds and where the funds are coming from...

You really should have an attorney set up your first fund then you can copy a lot of docs for the second etc.

Have the money held at a bank in trust (don't touch the funds). CPA is a must.

Have 2x the reserves you think you will need. Capital calls are not popular these days.

Also be careful with IRA funds...make sure they come in to your funds correctly through an administrator so that the IRA is not disqualified and subject to taxes.

Make sure you have investors sign off, that they understand the risks of investing in this fund or project.

Good luck,

Brad