Looking into my first syndication

[Krishna Monian]

Hi,

I got introduced and interested in real estate investing a few months ago, and have been exploring several options (SFR, syndications, multi-unit). I am currently considering a syndication deal with Ashcroft capital and was wondering if folks here have worked with them before (I did see a couple of references to them on the forums) and what your experience has been like? Also on a more general note, how do people go about vetting a syndication firm? That seems like the hardest part when going this route, and I would love to learn more about navigating this.

[Brian Burke]

@Krishna Monian I don’t have experience with the firm but I’m sure other folks on the site can help you with that question. 

As to your second question on vetting syndicatation sponsors, there is a great forum thread on the topic here:  https://www.biggerpockets.com/forums/432/topics/503289-how-to-vet-syndicators?page=1

What’s most important is track record. How much experience does the sponsor have, how long have they been in business, how have their deals performed (and do they even have any full-cycle deals), what have they done when things didn’t go according to plan—all of those are topics to explore. 

Another topic is key-person risk. This means “what happens if the one person doing everything dies?”  Having depth on their bench means that the other key folks can steer the ship to port minus one crew member. Solo operators put your cash at risk.

Everyone is a syndicator now—so look for groups that have survived a market cycle or two—and who have fully-cycled deals.  And realize that sponsor selection is one of the most important decisions you will make—a good one can produce the best possible result in the face of adversity. A bad one can screw up a perfectly good real estate deal.