What Qualifies As A Syndication Deal?

[Jordan Santiago]

Hey BP Fam,

I was wondering what exactly qualifies as a syndication deal? If 5 already active real estate investors want to come together, pool in money, and purchase an apartment complex does that qualify as a syndication? How does that work?

Or is syndication a bunch of people, with one or a couple sponsors, and many limited liability partners?

Can anyone put some insight in this and explain the specifics of it? Thank you, Happy Investing!

[Greg Dickerson]

@Jordan Santiago a syndication is when a sponsor or sponsors bring in a passive Investor or pools passive investors to provide capital for a deal or business. The key is the sponsor is the active manager of the deal the investors are passive.

If all of your investors are going to be active in the deal each with their own role then you have a partnership.

Best thing to do is speak to a securities attorney no matter which way you choose to go.  You should be able to get a free consultation and then hire them to draft whatever paperwork you need depending on the structure you decide to go with.