Wall Street To Main Street - The Investor Mindset

[Shelon Hutchinson]

How do you prepare yourself to take all this money from WALL STREET somewhere that you've been taught your whole life is safe, to invest in a real estate syndication on 123 MAIN ST?

1) Educate yourself about the asset class that you are committed to investing in. This is important because as you know, all investments are susceptible to risks.  In a real estate syndication, most risks are outlined in the Private Placement Memorandum (PPM).  The PPM must be read by all investors.  Additionally, an investor needs to have a good understanding of the Sponsor, the Market, and the Deal.  

2) Know your investment capacity. It takes some time for a lot of us to save enough money to invest in a real estate syndication. Sometimes these savings are just enough for a rainy day. In syndication, capital is not liquid and is expected to be invested for a few years. If this capital is all you have for a rainy day, syndication may not be for you.

3) Invest your capital gradually over a period of time and in different markets. This helps you to mitigate your risks.

4) Have emergency reserves. As you work to replace your active income with your passive income, you may be relying on your active income to maintain your lifestyle. These reserves will be crucial in weathering the unknowns these days.