Syndicating Deals for Special Purpose Single Family Homes

[DeWitt Gibson]

Hello Bigger Pockets -> This community never ceases to amaze me so I will through this out there: 

I know that syndicating deals to purchase commercial real estate is pretty common. There are a lot of parties and costs involved but the costs end up being a low percentage when you are dealing with the high dollar commercial projects. 

My question is there a cost and effort effective way to syndicate a deal for single family homes. Particularly for "Special Purpose" single family like Residential Assisted Live and Short Term Vacation Rentals. 

I see a lot of opportunity in these types of properties but they are very tough to finance using traditional lending so I am wondering if a syndication could be done efficiently enough to have that type of thing make sense. 

Thanks in advance!!

[Don Konipol]

@DeWitt Gibson

Attempting to syndicate or crowdfund has become easier than ever; successfully crowdfunding or syndicating is much much more difficult.

The lines between crowdfunding and syndicating are now very thin so that each contains elements of the other, a successful syndication will have an online aspect with many similarities to a crowdfunded project.

For a successful capital raise in real estate, the following are essential

1- A verifiable track record of success by the sponsor

2- A professionally prepared Private Placement Memorandum, Subscription Agreement and Operating Agreement

3- Compliance with Reg D 506 b or 506 c, Reg A or Reg A+, or Intrastate fully compliant offering

4- A large majority of ownership interest and benefits going to the capital investors

5- A no felony background check of the sponsor

6- Specific identified properties that will be acquired

7- A relatively small percentage of invested capital going for fees, costs and sponsor”s “promote”.

8- A professional online “platform” with all compliant security measures

9- A minimum projected return to investors commensurate with the risk

10 - Return of capital plus a minimum of profit to investors before sponsors get their cut

11- A quality deal

I have successfully completed over 200 syndications, each between $400,000 to $4,750,000.

I have examined thousands of other sponsors offerings. The once lacking one or more of the above more often than not failed to attract enough, and sometimes any Capital. Syndication is now a Very competitive business.