Long Term Goal: Multi-family Syndicator

Multi-Family and Apartment Investing
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Long Term Goal: Multi-family Syndicator

John Burns
Investor · Temple, TX · Member since 2019 · 5 posts · 0 votes

Hello all! I am a managing member of a multi-member LLC that currently invests in SFHs using a BRRR strategy. We are early in our business life but also have full time jobs that we are contractually tied to long term, so we can't drop everything and focus 100% on growing the business. However, that all starts to change in the next 5 years.

Our long term goal is to focus on syndicating 100+ unit multi-family deals and capture both syndicating fees as well as have equity stakes. In 7 years, we would like to lead a syndication as General Partners. I think our strength is that we will be able to bring cash to the deals. Our focus on executing a BRRRR strategy now will produce the net worth that we can leverage later for these syndication deals.

What advice would you give us to get ready to transition from SFH investing to syndication from now thru year 5? I know having cash available will be key, but can't be our only strength if we want to lead deals. What skills to learn, networks to build, and experience to gain would help round us out and set conditions for success? Thank you for your advice.

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Spencer Gray
Syndication Expert and Investor · Indianapolis, IN · Member since 2016 · 591 posts · 808 votes
6y

Why wait 5-7 years from now? Like @Chris Salerno said, you can invest passively with other syndicators and learn the ropes. You can even tell them (I did this) your plans and you will invest but want them to explain the process as the deal progresses.

If you already have the ability to raise funds and know how to rehab, you could approach a syndicator and propose being part of the GP by bringing in a large % of capital (more than 20% of the equity) in addition to you assisting with any rehab/construction/project management.

I did a write up on being a capital raiser / co-gp / guarantor recently if you're interested in learning more.

By doing this you get to gain experience while providing value to your investors and your partner/syndicator. You also will be able to leverage your partners experience, team and operations so your investors can be confident that there are pros running the deal and since they trust you already it's a win-win.

Good luck. You can do it THIS year not in 5 years.

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  • Kurt Jones
    Investor · Longwood, FL · Member since 2017 · 108 posts · 78 votes
    6y

    Simple answer, get a track record in multifamily. It’s a different animal from SFRs. Investors want to see your experience before dropping money into your lap. Congrats on thinking big!

    1Reply
  • Chris Levarek
    Real Estate Syndicator · Phoenix, AZ · Member since 2018 · 903 posts · 1k+ votes
    6y

    @John Burns Start finding partners for smaller multifamily deals and provide value through one of necessary roles. Syndication really is just a joining of efforts to accomplish something bigger then could be done alone. So network with others doing multifamily, then join forces. Even if you play a side role in the beginning, this is a good way to get experience and credibility in any realm.

    And of course, educate in all things syndication through podcasts, books, videos, webinars, etc. I don't think you are ever ready for anything new however doing new things makes you ready. 5 years is far too long, get started today!

    0Reply
  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    6y

    Building a track record, a network, and a brand are very important. The network will be your best asset for raising money when you need to. Make friends with syndicators and talk to them about their business. You can learn a lot from mentors, and you can also learn a ton from friends.

    1Reply
  • Chris Salerno
    Rental Property Investor · Charlotte NC · Member since 2019 · 306 posts · 183 votes
    6y
    Originally posted by @John Burns:

    Hello all! I am a managing member of a multi-member LLC that currently invests in SFHs using a BRRR strategy. We are early in our business life but also have full time jobs that we are contractually tied to long term, so we can't drop everything and focus 100% on growing the business. However, that all starts to change in the next 5 years.

    Our long term goal is to focus on syndicating 100+ unit multi-family deals and capture both syndicating fees as well as have equity stakes. In 7 years, we would like to lead a syndication as General Partners. I think our strength is that we will be able to bring cash to the deals. Our focus on executing a BRRRR strategy now will produce the net worth that we can leverage later for these syndication deals.

    What advice would you give us to get ready to transition from SFH investing to syndication from now thru year 5? I know having cash available will be key, but can't be our only strength if we want to lead deals. What skills to learn, networks to build, and experience to gain would help round us out and set conditions for success? Thank you for your advice.

    John, I hope all is well. Happy new year!! 
    I came from the single-family world and I am now a syndicator.  

    I would say if you can invest passively that would be the best way to understand how everything is operated. I would then start to listen to podcast, youtube, and read books on syndication. I think it can be extremely helpful when getting started. 

    Good luck! Looking forward to your success! 

    0Reply
  • Haydn Zeis
    Rental Property Investor · Columbus, OH · Member since 2016 · 60 posts · 100 votes
    6y

    @John Burns, I recently made the transition from investing in individual commercial properties (restaurants, retail, offices) and am now a syndicator.

    Cash is always a good thing to have, because it shows your investors that you're willing to invest and have skin in the game.  Also, you can personally guarantee some of your early deals.  Though, when it comes to experience, time is the only thing on your side.  I partnered with two established people; one has been investing in real estate for over 30 years and owns several rentals, a property management company, and real estate brokerage.  The other is a CPA who was an Audit Manager at Price Waterhouse and then the Director of Internal Audit and Director of Financial Planning and Analysis at Borden Foods before opening her own tax practice. Having these two people as partners, who have a solid track record, really helped establish our team as experts in real estate investing.

    Aside from that, read as many things as you can about the world of syndication. 

    Good luck!

    0Reply
  • Spencer Gray
    Syndication Expert and Investor · Indianapolis, IN · Member since 2016 · 591 posts · 808 votes
    6y

    Why wait 5-7 years from now? Like @Chris Salerno said, you can invest passively with other syndicators and learn the ropes. You can even tell them (I did this) your plans and you will invest but want them to explain the process as the deal progresses.

    If you already have the ability to raise funds and know how to rehab, you could approach a syndicator and propose being part of the GP by bringing in a large % of capital (more than 20% of the equity) in addition to you assisting with any rehab/construction/project management.

    I did a write up on being a capital raiser / co-gp / guarantor recently if you're interested in learning more.

    By doing this you get to gain experience while providing value to your investors and your partner/syndicator. You also will be able to leverage your partners experience, team and operations so your investors can be confident that there are pros running the deal and since they trust you already it's a win-win.

    Good luck. You can do it THIS year not in 5 years.

    2Reply
  • Greg Dickerson
    Developer · Charlottesville, VA · Member since 2018 · 4k+ posts · 4k+ votes
    6y
    Originally posted by @John Burns:

    Hello all! I am a managing member of a multi-member LLC that currently invests in SFHs using a BRRR strategy. We are early in our business life but also have full time jobs that we are contractually tied to long term, so we can't drop everything and focus 100% on growing the business. However, that all starts to change in the next 5 years.

    Our long term goal is to focus on syndicating 100+ unit multi-family deals and capture both syndicating fees as well as have equity stakes. In 7 years, we would like to lead a syndication as General Partners. I think our strength is that we will be able to bring cash to the deals. Our focus on executing a BRRRR strategy now will produce the net worth that we can leverage later for these syndication deals.

    What advice would you give us to get ready to transition from SFH investing to syndication from now thru year 5? I know having cash available will be key, but can't be our only strength if we want to lead deals. What skills to learn, networks to build, and experience to gain would help round us out and set conditions for success? Thank you for your advice.

    Don't wait to get going. If you can do SFH you can do Apartments. First step is to educate yourself on the process, types and classes of properties, the financials and market fundamentals. You can always partner with an experienced operator if you feel your time is limited.

    1Reply
  • Todd Dexheimer
    Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
    6y

    Educate yourselves, build your networks, build a thought leadership, start using private money for your current deals and perform well. 

    I would also start networking with multifamily syndicators that you can align with. Invest in their deals, help bring them money and other value in order to gain a small share in the GP. This will greatly accelerate your business.

    0Reply
  • John Burns
    OP
    Investor · Temple, TX · Member since 2019 · 5 posts · 0 votes
    6y

    All, thank you for all your advice. We are going to start going to more multi-family focused meetups and expand our network and knowledge. That way we can meet current investors and deal sponsors and see where we can start getting in on some deals now. Thank you again!

    0Reply
  • Alina Trigub
    Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
    6y

    @John Burns

    While you've received a ton of great advice, I'll summarize the steps and give some articles to guide you further:

    1) start by buying multi's (MFH) on your own to build a track record

    2) learn about MFH and commercial real estate investing through books, podcasts, and networking

    3) build a team of PRO's: attorneys, CPA, insurance agent, contractor, property manager, etc...

    4) work on expanding your mindset. It can also be done through books and exercises

    5) connect with potential future investors. relationship building takes time and consistency!

    6) Take Massive Action!

    https://www.biggerpockets.com/member-blogs/10850/86621-six-steps-approach-to-getting-started-in-real-estate 

    https://www.biggerpockets.com/member-blogs/10850/87253-should-i-scale-my-investment-from-single-family-homes-to-multifamily

    https://www.biggerpockets.com/member-blogs/10850/85351-nothing-will-work-until-you-do-maya-angelou


    2Reply
  • John Burns
    OP
    Investor · Temple, TX · Member since 2019 · 5 posts · 0 votes
    6y

    @Alina Trigub Thank you for the step by step advice. I appreciate your thoughtfulness and time.


    -John 

    0Reply
  • Dylan McCabe
    New to Real Estate · Dallas TX · Member since 2018 · 43 posts · 23 votes
    6y

    @John Burns

    John, I think out of all the advice, the biggest key for "building a track record" is finding a mentor. I agree with what everyone else said too - read, invest, educate yourself, etc. However, it becomes overwhelming sifting through all the information on multifamily investing when you're new to it. 

    I would attend local multifamily meetups and search here in BG for a local mentor. Some are paid and others are free. I would look for a free mentorship in exchange for the value you can offer them somehow. 

    I found a mentor in Dallas TX who has traded over 13,000 units. I offered to help with raising money and online marketing in exchange for mentorship. It was a great win-win situation. 

    Without a mentor, it's like learning jiujitsu on your own. Yes, you can get some progress, but it will take way too long. A mentor will speed up the process significantly and ensure you don't get lost in the weeds.

    Dylan McCabe

    VP of Business Development

    The Charis Group

    www.charisg.com

    0Reply
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