Bookkeeping for Syndicate

[Dennis Tierney]

Please double check my thinking to be sure I've got it right. I'm setting up a syndicate for apartment purchase. The amount needed for the 25% equity and closing costs will be $550,000. There will be $50,000 needed to cover operating expenses till it is stabilized. I plan on charging a $60,000 fee for the syndicator and will use $50,000 of it as my equity buy in. The units are $10,000/unit.
$550,000+50,000+60,000=$660,000 equity raise but when the 5 syndication units are added that equals 71 total units that will be divided into the income to determine the quarterly distribution. Am I correct?

Thanks

[Ray Johnson]

@Dennis Tierney I've only had experience with larger syndicating and haven't seen a scenario in which the Sponsor is getting shares for Sweat Equity, typically the Sponsor is getting paid under the Management entity only if no capital was used to purchase shares in the Syndication. Is anyone getting preferred shares? What you're wanting to do may be possible depending on how the Syndication is legally structured. I've noticed a lot of what is talked about on BP doesn't take place in the higher income deals so it's new information for me. Make sure to run it by the Attorney, Tax Strategist on the team to get their thoughts.