There are many successful syndicators. And to some degree "success" rate can be subjective, sort of like asking which apple type do you like best: granny smith or golden delicious.
Keep in mind, the most successful syndicators will have a much higher entry point level, somewhat close to institutional investing entry point. I don't know your personal situation and maybe you do fit this profile, but most people that come to BP at first don't.
As @Todd Dexheimer mentioned, there are many deal sponsors on BP. Do the reverse engineering and search BP, go through the threads and identify syndicators and passive investors. Reach out to both, ask questions and determine what works best for you.
I wrote the following blog post to give investors an idea of questions to ask syndicators:
Rental Property Investor · Sacramento · Member since 2019 · 129 posts · 108 votes
7y
I did a bunch of research on that last year, and all the top multifamily syndicators I found who are doing the biggest deals limit their investors to a minimum investment of $25 million.
This question is kind of like asking what is the best property I can buy right now.
What area are looking at? Value-add, core? What classes of properties? What are your return hurdles? how much risk do you want to take on?
Also, I am not sure why the biggest would matter unless you are trying to put a vast amount of money to work at one time. otherwise, why would you want to invest with a firm targeted to huge checks?
In short in my opinion like all RE, define what you want to buy, find really great people doing it and go from there.
Rental Property Investor · Pasadena, CA · Member since 2018 · 12 posts · 9 votes
7y
Ken McElroy’s MC Companies has been very successful. At last count they had one billion dollars of properties, mostly multifamily, under management. Praxis Capital and Gelt Inc. are both operators who have been very successful in Multifamily.
I have not invested with any of these three but would consider it in the future.
Investor · Hendersonville, NC · Member since 2013 · 754 posts · 281 votes
7y
Hi all. Thanks for the names. It's fair what you point out, @Charles Worth . The first two I am considering are Rod Khleif of REM Capital, and Neil Bawa, of Grocapitus. Both are big in the arena of education, and do their own deals a couple/few times a year. They bring folks in at $75k, $100k at minimum. Value-add multifamily to be specific. One person mentioned to me that the public figure/podcaster/guru angle wasn't very reputable so I was reaching out to see if there are others who are also recommended. So far, Praxis came up twice. And McElroy's book was recommended by the instructor of a class I am taking. He - Teo Nicolais - is actually a successful syndicator, but there is the conflict of interest. So yah just looking for 8% a year in returns and a 50-70% gain on equity reversion. I believe @Brent Shields does syndications so I will PM him.
Investor · San Diego, CA · Member since 2016 · 265 posts · 305 votes
7y
Jason Merchey
Dave Steele / Western Wealth Capital. They offer an infinite return model on some of their deals. This gets a stamp of approval from Mr. Kiyosaki. You must be accredited to play.
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
7y
@Jason Merchey there are quite a few syndication companies being represented on BP. Most say it on their profiles and are often posting on BP. I would do research on them, have a phone call with them and get to know them. Most have their own podcast or at the very least have been on several different podcasts.
There are many successful syndicators. And to some degree "success" rate can be subjective, sort of like asking which apple type do you like best: granny smith or golden delicious.
Keep in mind, the most successful syndicators will have a much higher entry point level, somewhat close to institutional investing entry point. I don't know your personal situation and maybe you do fit this profile, but most people that come to BP at first don't.
As @Todd Dexheimer mentioned, there are many deal sponsors on BP. Do the reverse engineering and search BP, go through the threads and identify syndicators and passive investors. Reach out to both, ask questions and determine what works best for you.
I wrote the following blog post to give investors an idea of questions to ask syndicators:
Investor · Charlotte, NC · Member since 2017 · 791 posts · 479 votes
7y
@Jason Merchey there a ton of syndicators on BP, some very very experienced and some only a few years into the business. As others have mentioned, getting on a call and asking them tough questions is best. Outside of BP, you can do some searching or set up google alerts in markets your looking to invest in. By setting up google alerts ie. Charlotte apartments you will get updates on when something is acquired and you can look them up to see if they run a syndication model.
Rental Property Investor · DFW TX · Member since 2018 · 179 posts · 260 votes
7y
Not a lot of hard numbers above, so let me help make it very clear that MF really works.
I am in a network of deal sponsor and investors; to date, I have invested passively with a dozen or so sponsor in the network. 13 deals have come to term (three are still calculating distributions) and in those I have seen the following IRRs, after the sponsor fees:
79% $100K --> $281K in 19 months
58% $50K --> $159K in 34 months
45% $100K --> $324K in 42 months
35% $75K --> $136K in 23 months
29% $125K --> $475K in 6.2 years
20% $150K --> $338K in 2.8 years
The rest are less impressive, the worst (so far) was 5.4% IRR (others were 18%, 16%, & 13%) -- Nope, have not had a loss (yet)! But I do know of a few outside our network - be careful!
I did a bunch of research on that last year, and all the top multifamily syndicators I found who are doing the biggest deals limit their investors to a minimum investment of $25 million.
Which leaves me out of the picture.
Sounds like a fund. Are there really one-off multifamily deals taking investors that large?
If you search "list of syndicators" on BP, there are a ton of thread that have answered your questions.
Also, continue to browse the multifamily forums on BP, look for syndicators who are posting valuable content on a consistent basis, and check out there websites.
Not a lot of hard numbers above, so let me help make it very clear that MF really works.
I am in a network of deal sponsor and investors; to date, I have invested passively with a dozen or so sponsor in the network. 13 deals have come to term (three are still calculating distributions) and in those I have seen the following IRRs, after the sponsor fees:
79% $100K --> $281K in 19 months
58% $50K --> $159K in 34 months
45% $100K --> $324K in 42 months
35% $75K --> $136K in 23 months
29% $125K --> $475K in 6.2 years
20% $150K --> $338K in 2.8 years
The rest are less impressive, the worst (so far) was 5.4% IRR (others were 18%, 16%, & 13%) -- Nope, have not had a loss (yet)! But I do know of a few outside our network - be careful!
Regards,
Charles LeMaire
Those are amazing numbers. What is this network of which you speak?
Investor · Hendersonville, NC · Member since 2013 · 754 posts · 281 votes
7y
This is all good info, thanks all. Yah, I would certainly want to invest $1 with R.K. because in this current syndication he's promoting, he "lets you under the hood" with ample webinars and even walking the property over a day or two, having lunch and dinner while you're there, etc. Definitely worth the price of a plane ticket.
All of this is obviously long-term. I was also, perhaps primarily, thinking of rolling up my sleeves and investing as lender in Charleston and areas within 100 miles - SFD fix and flips, basically. I asked a mentor I have about whether he likes syndications, and he feels that there is 0 control there, and occasionally, getting out is problematic. He prefers to work his craft and have 15-20 loans going at once. He is obviously a hard worker and is very self-confident.
If I had much more capital than I do, I think syndications would be ideal because they are plug and play.
Rental Property Investor · DFW TX · Member since 2018 · 179 posts · 260 votes
7y
@Jason Merchey - I am a very happy student and member of Brad Sumrok's network; I call it Sumrok University. I have been working with Brad since I walked in off the street, knowing very little about RE in 2010.
If you are interested, he has a upcoming recruitment event: March 9th & 10th. And if you want more detail (I have plenty of opinions) send me a message.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
7y
My intuition is that the biggest operators are working fully behind the scenes, mainly raising money from Family Offices. Most of us posting on BP are raising money in $50k to couple hundred $k increments, buying a few hundred units at a time. The big dogs out there are raising millions from each investor, buying much larger portfolios.
Bozeman, MT · Member since 2012 · 12 posts · 17 votes
7y
@Jason Merchey I’ve done some research on this. To date I’ve only invested in MHP funds but I’ve asked about MF syndicators. A couple big movers and shakers here on BP both had very good things to say about Brian Burke at Praxis. Again, I haven’t invested with Praxis but I have yet to hear a bad thing about them. Good luck!
Lewisville, TX · Member since 2015 · 343 posts · 264 votes
7y
Not all syndications from top syndicator or their students meet projections. As the other DFW investor doing multiple home run syndications during the markets big multifamily upswing the last few years didn’t point out. I’m in a syndication with one of Brad Sumroks student & one deal was a Home-run while one I’m in & several others have underperformed to the point of creating a possible loss of capital not to mention the time involved. I would recommend mobile home parks over multifamily at this point in the cycle & get to know a lot of syndicator’s & potential deals. Then take a hundred thousand & spread it in 4 $25k minimum deals with 4 different operators & in several different classes & geographic areas!
United States · Member since 2015 · 401 posts · 394 votes
7y
@Brent Shields there are plenty of reputable and strong performing Sponsors / Operators that let investors in at a much smaller minimum, i.e. $50K plus. The Sponsors that you are talking about are the BIG players and, yes, it's much more difficult for the common accredited investor to get involved.
@Jason Merchey as others have said, there are plenty of reputable Sponsors represented here on BP. If you dig around the forums enough, you will find plenty. Reach out to some of the folks who post a lot in syndication related forums and ask what they're up to!
Who are the biggest and/or most successful multifamily syndicators out there in the world, or on BP?
Anyone heard of any syndicators to stay away from, or who have had to make significant or repeated capital calls, or who have been sued?
There are a lot of syndication deals and equity raisers out on here now. I would just do some research on the company when you find a deal you think looks good.
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
7y
Couple of key things to consider:
Lending on local fix and flips is not a comparable alternative to investing in syndications...one is a short term strategy and the other is long term (i.e. have to vet 10+ properties (and flippers) over five years vs investing in 1 five year syndication)
Getting out is always (not occasionally) a challenge with syndications
Mentor has a lot of eggs in one basket (single market fix & flip)
Do not, I repeat, do not invest all in one network/coaching program with inexperienced sponsors
Many passive syndication investors diversity across asset classes (MF, MHP, SS, dollar stores, grocery stores, government buildings, etc.) and across geographies
To answer your actual question, below are ways to ferret out opportunities:
Network...a lot (on BP, at meetups, with commercial real estate brokers)
Network with other passive investors (find them on BP)
Contact Jeremy Roll to get in his investor database (I have no affiliation)
Call the top 50 or so operators in the asset class that you are interested in (MHP academy has a list for MHP operators, insideselfstorage.com for SS, etc.)
Call the large local commercial brokers and see who is syndicating in your market of interest
Listen to podcasts (not just BP) and call the guests who are syndicators (they jump on the podcast circuit when they have an open offering)
The crowdfunding sites have a ton of offerings
Analyze a ton of opportunities and contact lots of sponsors
It starts to snowball from there
It can take a year or two to generate good deal flow.