Upfront Costs to Syndicating 506(b) in 2022

[Cole Farrell]

Hey there!

I've been investing in small multifamily for a few years and I've done everything from flips, to professional management, to wholesaling and more. With that said, I'm looking to advance to my end goal - investing in large multifamily. I've done all the "prep" work thus far to syndicate and now I'm at the stage of looking for a deal and purchasing. I'm working with an experienced syndication coach who is helping as well. As I'm analyzing deals and getting ready to offer, I'm realizing I don't have a good enough grasp on the actual upfront costs of purchasing (a little late I know). So my question is, what is a reasonable range to expect for costs associated with syndicating a large multifamily property? Specifically for legal fees (SEC docs), inspection costs (due diligence, environmental), etc? 

Thanks in advance! 

[Ryan Sarka]

Hey @Cole Farrell,

I can tell you approximately what it cost us on our last syndication of 32 units in Louisville. That said there are a lot of different factors that will contribute to the costs being much higher or lower than these such as location, property vintage, property condition, local laws, size of the raise, number of partners, back and forth + amendments on the PSA, etc.

Our SEC Attorney was approx. $15k

Property, pest and radon inspection ~$150/door

Sewer scope - ~$350

Phase 1 - ~$4000

Appraisal - ~$4500

PCA - ~$4000

The list goes on, in total the acquisition costs were around $100k not including escrowed funds, taxes and insurance. There will also be misc fees like entity creation, State Filing Fees, etc.

DM me if you want to jump on a phone call one day and talk through it. Great job doing all of your homework and good luck!