Structuring a real estate syndication

[Saverio Nestico]

Hey guys! Thanks in advance for any guidance... I am entering into the world of syndication (large #multifamily income producing, value add investments) and I’ve been educating myself through my experience, constant practice of analyzing investments, reading and listening to podcasts. I’ve created a model investment Proforma and been using it to practice and analyze real estate offerings that are currently on the market. I have tons of questions but I’m stuck on 3 in particular. I am trying to create as much of a systematic model as possible 

The investment i am currently evaluating is a value add 55 unit building 

Current Operating Income - $512,020

Current Operating Expenses - $170,000

1. How much $ in Reserves do you typically allocate for an evaluation like this? Is there a % model to use regardless of the size? I would like this to be held back after all operating expenses and debt service is paid but before any investor distribution is allocated. How should i structure this? 

2. Do you include the upfront insurance premium cost in the raise amount? On this property the annual insurance cost is approx. $18,000 so the upfront cost i budget for is 25%. Do you even include it or use the proceeds from the 1st months rent and then chase the rest?

3. How to incorporate attorney fees with setting up the syndication documents? I imagine the first deal will be the most costly and every deal thereafter will cost a bit less