What to Expect After You Invest In a Deal

[Jorge Abreu]

After you invest in a real estate syndication, you will get regular updates on the progress of the project after the deal closes. At any time, you can ask for more information or clarification, but when a unit floods due to plumbing issues, you will not be the one the tenants call!

Here are the things you should expect from the time a real estate syndication deal closes through the time that the asset is sold:

Upon Closing

As soon as the real estate syndication deal closes, you can expect a note letting you know that the deal actually closed. Included within the notice will also be an Investor Guide, which will give you a high-level overview of what to expect moving forward and answer some frequently asked questions, including questions about the timing and logistics of your cash flow distributions, how to set up your auto draft deposits, tax-related questions, and more.

Monthly

Every month after that, you can expect to receive an update on the progress of the real estate syndication project via email. Depending on the deal, you will also receive either monthly or quarterly cash flow distributions. The update emails include things like the current occupancy, how many units have been renovated that month, whether the renovations are on track with the business plan, and occasionally some photos of the latest progress. This will help you to keep a quick pulse on the project. The progress updates are mostly anecdotal and include a quick high level overview of the different initiatives going on at the property.

Quarterly

Every quarter you can expect to receive a detailed financial report, including the rent roll and the profit and loss statement from the trailing twelve months. Beyond the anecdotal updates you’d get each month, these quarterly reports are much more detailed and give you a line-by-line breakdown of exactly how the asset is doing financially. These quarterly financial reports are not exactly the most fun to read, especially if you’re not a spreadsheet lover, but I highly recommend you at least crack them open to take a look. Even a quick scroll through the pages will give you a decent idea of the overall performance of the asset and the metrics used to assess the ongoing progress.

Annually

Every year, during tax season, you can expect to receive a Schedule K-1, which is a tax document issued for an investment in a partnership, like a real estate syndication. The purpose of the K-1 is to report your share of the income, deductions, and credits. A separate K-1 will be issued for each real estate syndication you’ve invested in. They are typically issued around the same time as 1099s and serve a similar purpose for tax reporting.

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