More specifics on apartment syndication

[Ryan McGlasson]

Recently since listening to an older biggerpockets podcast on a member who would syndicate large apartment buildings and any other deals they wanted to purchase I was really intrigued by the idea. A large reason because of the ability to start in real estate without any of your own money really. Which is essential because I do not have the net worth or capital needed for loans or investing money. So upon listening to this podcast and a few others I have become extremely interested in the niche. But in my quest for knowledge I gain many more questions! While I do have a basic understanding of how syndication is performed, I am not understanding key details that I do not seem to be able to find the answers to on the forum or the internet so I wanted to ask here for those who are more experienced, or have any experience at all or knowledge to share.

As a sponsor I am not putting money in the deal just putting it together and making the many moving parts work together. I hear often that it is a wise idea and completely possible to start in real estate in multifamily with a 16+ unit as a first investment because the bigger and more units the less of a risk, which I agree with. What I do not understand is how as a sponsor I can get any lender to loan me the rest of the cash. My understanding is to gain a non-recourse loan, the loan minimum would need to be $1,000,000.If this is the case then the downpayment at minimum would need to be over 250k for a 20% downpayment? Or is it 25%? Do i need to include the repair fee and closing cost with the downpayment? 

I have good credit but no liquidity, no 6-9 month reserves for a property that size and no net worth so to my knowledge a lender will never lend me anything no matter how good a deal correct?  Do letters of intent from an investor really do anything to negate not having those requirements? 

The way I have read around this is to have the limited partner be the one to sign on the loan in exchange for more equity. If this is a solution, then how does this change the sponsor-limited partner relationship? If the sponsor is the one who was supposed to sign for the loan but they cannot how does the contract still come together as me being a sponsor? Would they just split the title with the partners name on the mortgage?   Generally I know you wouldn't want to have an investor sign anything like that but this is a family investor who is willing, but still I would want a method to avoid that and have it signed to me if possible and the limited partners both on non-recourse atleast but then it leads back to the issue of how would I ever realistically get bank funding? Should it be avoided completely and look into hard money loans?   

Advice is appreciated and I thank you in advance. Just need a little nudge in the right direction and I am off.

[Juan Vargas]

@Ryan McGlasson, if you wanted to put a deal together, you would have to bring something to the table. If you have no liquidity, net worth or experience then your best bet is to find a deal that realistically makes sense and take it to a proven sponsor with the track record necessary to take it down. 

You mention getting a non-recourse loan. Typically to be able to qualify for one, your family member definitely would still need to qualify. Does he/ she have experience and a track record with multifamily, specifically with non-recourse type loans? 

If your family member has the liquidity and net worth required and you are able to find an opportunity, you would still need to meet the lender requirements as far as a proven track record. Again, this all comes back to building good relationships with sponsors and if/ when you find a TRUE deal, you can leverage their experience and move forward. 

And to answer your question. Yes, you technically would be a co-sponsor if you signed on the loan with others on the GP side.