5 Key Communications You SHOULD Receive In A Syndication

[Justin Goodin]

There are 5 key communications you should receive at important intervals once you invest in a real estate syndication. From the closing date, through the hold period, until the asset sale, here’s what to look for:

• Investor Guide – upon closing
• Progress updates – monthly
• Cash flow distributions – either monthly or quarterly
• Financial reports – quarterly
• Schedule K-1 – annually

Your active participation in a real estate syndication is complete once you’ve reviewed the investment summary, signed the PPM (private placement memorandum), and sent in your funds.

Once all investor funds have been submitted and the deal closes, the sponsor team begins executing the business plan through renovations, property improvements, and increasing rent and occupation rates among other things.

Make sure you are vetting the sponsor correctly on your next passive real estate investment. Similar to how a child’s sponsor receives regular updates about their life from afar, these key communications help keep you in the loop throughout the lifecycle of your real estate syndication investment. 

[Mike Dymski]

#6 - "We have sold the property and generated a 15+% investor IRR!"

[Jim Stout]

Nice summary Justin. It's good info for new investors.  A limited partner in the syndication should be updated and informed regularly and timely for sure. Another aspect they need to understand if new to the process is to understand to let the GP(s) do their job.  It's important to vet your sponsor and rely on the scheduled updates and not try to micro manage by asking for updates constantly.  We do a lot of land development deals and it can be a slow process taking the land through rezoning and entitlement. MF can see progress and income almost immediately, but land can be 3 to 6 months before significant headway is accomplished. Thanks for the post Justin.

[Evan Polaski]

@Justin Goodin, I think you are putting out some great topics.

With this one, I would add: 6, or 7, timely updates on major events.  I.e. the winter storm that hit Texas, or hurricanes in the area of any SE properties, etc.  

But that being said, my view is less about the frequency of communication or distributions, and more the expectations set and then meeting those.  If you promise monthly updates by a specific time each month, then you need to send monthly updates by that date.  

[Justin Goodin]

@Evan Polaski Thank you!

I agree with your points. Consistency is key, especially when you are dealing with investor’s hard earned capital. 

[Paul Moore]

Hi @Justin Goodin. Thanks for your comments. Can you explain the “Investor Guide”?  I’ve been in the syndication realm for years and that’s a new term to me.  :-) 

[Justin Goodin]

Originally posted by @Paul Moore:

Hi @Justin Goodin. Thanks for your comments. Can you explain the “Investor Guide”?  I’ve been in the syndication realm for years and that’s a new term to me.  :-) 

Upon the close of a real estate syndication deal, investors should expect an email notification letting you know that we have closed on the property. Included in that same package should be an Investor Guide, which will provide an overview of what to expect in the following months/years and answer some frequently asked questions, including questions about cash flow distributions and taxes. Just something to make the process easier for them 👍

[William Costello]

@Justin Goodin great list, I would also add updates as well like weather related and also to your quarterly reports go into more detail outside of the financials