Tips on Syndication Investment for beginner RE investor??

[Paul Cessarini]

I am just getting started with RE investment, have a general concept of it after going through lots of reading. My plan is to eventually get into triplex/multi unit investment, but it's going to take some time. Recently I came across a Syndication deal which has a potential of 1% cashflow every month and some profit sharing after the hold period of 5 year. These people are fairly new ( just over 1 year) but have a great investment deals and have studied the market thoroughly based on the slides they send me. I am considering to invest 50% of what I have, so I can have a passive cash flow while I prepare to get started in RE investment on my own. Is it a good strategy? 

Any tips on the syndication investment is greatly appreciated. TIA

[Taylor L.]

@Brian Burke's book is a great place to start.

Personally I would never invest 50% of what I have in any one passive deal, no matter how great it looked. As a passive investor you need to study the market too and not just take the sponsor's word for it. Learn the basics of how to check the sponsor's math and see how their assumptions impact your projected returns. 1% monthly cash flow is a pretty strong projection at this point in the cycle, so it needs to be backed up with equally strong evidence.

Protip 1: Everyone says they underwrite conservatively. Everyone. The proof is in the pudding, and it is on you to check their math and see if you agree with it or not.

Protip 2: there will be more passive syndication investment opportunities down the road. You do not need to feel FOMO if you pass on this deal, because this team will do more deals and they are not the only game in town.