Looking for Cash Flow... Syndication?

[Brian Lewis]

My main goal in Real Estate is to generate cash flow. From listening to the podcast, it seems like getting in with a successful syndicator can be a good way to make good money. How do I find these syndicators? How do I know who is good? I imagine there are many syndicators on bigger pockets. I love the idea of owning a piece of an apartment building. I'm interested in the Atlanta region but honestly if it makes me money, I don't really care?  I asked a lot of questions but I'm just trying to learn more about these big syndication deals. The guy on the podcast said if your dream is get into commercial multifamily then dont bother starting small, just jump right into commercial multifamily... welll uhhh i don't know how to do that. I don't have that much money and I have ZERO experience. 

[Brian Burke]

The first step is to learn how to ask the right questions to see if the group you are talking to is a good fit.  The thread I linked to above is a good start to learn the questions to ask.  From there the process is different with every sponsor. Some will send you offering documents as soon as they get your email address. That’s a sign of either desperation, inexperience, or downright carelessness.  Not to mention likely ignorance of the law. Avoid any group that does that. 

Other companies will set up a phone call to learn more about your goals and objectives.   The objective is for you to learn more about the company and it’s offerings, but just as important, for the company to learn more about you. As much as you want to learn about the company you are seeking to invest with, the company wants and needs to know if you are an accredited investor (as determined by net worth or income minimums), and if their offerings are a fit with your goals and objectives. Good syndicators know that having the right investors, not just any investors, makes the investment (and their company) more successful.

As to your question of how you make money, the answer is no different than with any real estate investment—cash flow, appreciation, loan amortization and tax benefits. Investors typically receive the majority of the income (and offsetting depreciation), all refinance proceeds and a share of the upside.