How to start syndication

[Shar Rivera]

Newbie to real estate. How do I start with syndication? Should I just invest with platforms like realtymogul or Fundrise? Any pointers on how to get started in some deals would be great!

[Todd Dexheimer]

As a newbie, you need to learn about what a good deal is and what a bad deal is. Start connecting with companies that syndicate and look at their deals. Also go on the the crowdfunding sites and do the same. I would caution about getting too caught up in the numbers. Look at the story and decide if it is realistic. Are they being conservative or expecting everything to go perfectly? 

To learn more about syndication, click here: 

https://www.biggerpockets.com/blogs/10145/72118-sy...

and

https://www.biggerpockets.com/blogs/10145/73373-op...

[Lane Kawaoka]

I would recommend using your own money to start and make mistakes with.

[Todd Dexheimer]

As a newbie, you need to learn about what a good deal is and what a bad deal is. Start connecting with companies that syndicate and look at their deals. Also go on the the crowdfunding sites and do the same. I would caution about getting too caught up in the numbers. Look at the story and decide if it is realistic. Are they being conservative or expecting everything to go perfectly? 

To learn more about syndication, click here: 

https://www.biggerpockets.com/blogs/10145/72118-sy...

and

https://www.biggerpockets.com/blogs/10145/73373-op...

[Omar Khan]

@Shar Rivera Syndication has become a buzz word. You will have a hard time gaining any traction without a track record in real estate, underwriting, commercial brokerage, legal/accounting, property management or portfolio management. 

You can participate as an LP/investor which requires you to be either a sophisticated or accredited investor (depending on the way the deal is structured). 

Even then you will need to learn the difference between a good deals a bad deal (re: @Todd Dexheimer). The numbers are important but you have a look at all the factors especially the market and lending side of the equation.

[Brian Adams]

@Shar Rivera

Here is another resource for you on syndications

Apartment Syndications And How To Tap Into Huge Passive Income Profits

[Caleb Heimsoth]

Well step one or near step one would be you need to know a lot of people with a lot of cash. Then you need to convince them to give it to you. Then you need to find an investment where you can give them a return and still make money for yourself.

Then after all that, you’re golden. See nothing to it

[Alina Trigub]

@Shar Rivera It's clear from your question, whether you'd like to "start with syndication" on GP or LP side. I'd deduce you're referring to LP side and want to invest as an equity partner in a syndication since you're comparing it to crowdfunding platforms. 

My word of advise is, to educate yourself on what syndications are about, what type of asset classes are offered through syndications, what type of financial pre-reqs they have, familiarize yourself with SEC ruling 506 D both options b and c.  Read a few books on syndications. I'd start with "Perfect Investment" by Paul Moore. Talk to people that have gone that route. Happy to share my experiences offline.

Feel free to PM me with questions.

Best!

[Shar Rivera]

Thanks @Brian Adams . Yes, @Alina Trigub was looking on the LP side. Sitting on some cash that I'd like to diversify. I'm an accredited investor. I use platforms today but was wondering how I go about finding more deals directly. Thanks!

[Sherwin Gonzales]

@Shar Rivera, great topic and you've already received some great advice from others on this thread! I would advise to figure out what exactly are your goals? What are you trying to achieve? Do you want to be a passive or active investor in syndication? If you invest in platforms like realtymogul or Fundrise, then it seems like you want be more passive.

If you want to be more active, I would suggest to partner up with someone who has experience in syndication. You could also be passive in a deal, but maybe work out an agreement where the general partners could involve you in their communications through emails or calls. Maybe you can do a "ride along" and visit the property if possible. Get first hand experience that way. That's how I got started!

Good luck with whatever you chose to do!

[Michael Le]

@Shar Rivera, most syndications outside of crowdfunding are done under 506(b) exemption which requires that you know each other. So if you're looking to find deals more directly then you can connect with syndicators on BP or go to local meetups and find some in person. 

[Jeffrey Goddard]

You've got more than enough to get your juices flowing here. Just a quick tip to avoid concerns down the way: rule 506(c) allows for general solicitation, 506(b) does not. I would be wary of anybody you meet on BP or in a networking event that immediately jumps to investing. The SEC is fairly rigid on what a prior relationship looks like, and Facebook friends doesn't cut it. There is some grey, but do you want to be open to the risk by playing in the grey? 

As an LP/investor that may not affect you from an SEC standpoint, but as a rule I do not do business with people that cut corners so dangerously, and would suggest you don't either. Whether through ignorance or willfulness, they open themselves up to risk, and do so holding your money. Something to think about. But, as always, an attorney well versed in securities law is going to be your best asset.

[Michael Bishop]

@Shar Rivera, you've got some good advise above. I would recommend, in order to start learning some of these things that others have suggested, to start networking with syndicators and take any educational content they will offer you. Some will be good, some will be bad, but it's all a part of the learning process. BP is a good starting point as there are plenty of folks on here that operate in the niche.

[Kim Lisa Taylor]

I suggest you first decide what you want to invest in, i.e, multi-family, self-storage, hotels, mobile home parks, retail shopping centers, office, industrial, etc., and then attend some training events in those asset classes. Try to find the largest groups you can who hold live events, where you will be most likely to meet people who are actually doing syndications. This will help you learn how to spot the good deals from the bad, and what to look for in a syndication. 

I am sure the BP group can suggest some trainers, and I would be happy to suggest some offline.

[Paul Moore]

Hey @Shar Rivera  Lots of great advice here. I’m actually doing a BP Live session tomorrow (Monday 6/18) at 4:00pm ET to explore 7 different paths to invest in commercial real estate.  We will be covering some of the issues discussed above.  I welcome you to join via BP Live, YouTube Live or FB Live or you can watch the replay later. 

[Matt Millard]

Start with crowd sites & low minimums to learn the ropes as an LP. Watch YouTube video & see articles on solid cash flow investors like Jeremy Roll. If you spend enough time in the right circles you will start to see deal flow & learn what’s a bad deal versus good or even great! Experience & solid due diligence & having filters & criteria like Buffett & Jeremy Roll does is key!

[Mike Dymski]

Below is a good podcast on building a passive real estate portfolio.  I have no affiliation with them.

https://forinvestorsbyinvestors.com/library/episod...