How to start syndication

Question

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!

Caleb Heimsoth · Answer

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

Omar Khan · Answer

@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.

Todd Dexheimer · Answer

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

Alina Trigub · Answer

@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!

Paul Moore · Answer

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.

Jeffrey Goddard · Answer

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.

Brian Adams · Answer

@Shar RiveraHere is another resource for you on syndicationsApartment Syndications And How To Tap Into Huge Passive Income Profits

Lane Kawaoka · Answer

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

Mike Dymski · Answer

Below is a good podcast on building a passive real estate portfolio. I have no affiliation with them.https://forinvestorsbyinvestors.com/library/episod...

Matt Millard · Answer

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!