Syndication - needing financial solvency/guarantor?

[Chris Duffy]

I would like to raise private money from investors I know personally to syndicate a commercial multi-family project(under $1 million and between 2-12 units). I would act as managing partner. I have never syndicated a deal before. Would a commercial lender only finance a syndication if the sponsor/MP had sufficient financial reserves or is there a way around this? I would come up with the 25% from the private investors then finance the rest of the deal. From what I've read, they require a guarantor which again I don't have substantial financial solvency to act as any kind of guarantor. I read even hard money lenders require a gaurantor for 5+ units. Would keeping it residential(2-4 units) be a better way to go to get started until I've built up more capital? Thank you!

[Ryan Sarka]

@Chris Duffy I just completed my first syndication and can confirm that @Aaron W. is correct. I was/am in the same boat as you, to get around this we have a larger GP team (4 people). This was because we combined 2 GP teams of 2 people but it also worked out well - between all 4 of us we were able to meet all of the lenders requirements. One thing that's worth remembering is that *almost* nothing is set in stone. Our mortgage broker originally said the GP team had to put in 50%, after saying we were not he went back to the lender and negotiated for us. My recommendation is to find a good mortgage broker and build that relationship, they can be invaluable when looking for commercial loans. 

Syndications are expensive so going smaller may not make sense but every deal is different! Good luck!