My First Multifamily Syndication

[Chris Soignier]

Investment Info:

Large multi-family (5+ units) buy & hold investment in White Settlement.

Purchase price: $2,950,000
Cash invested: $50,000
Sale price: $5,050,000

La Plaza Apartments, 83 doors - I owned a 5% stake in my first multifamily syndication.

What made you interested in investing in this type of deal?

The opportunity to earn double-digit passive returns and increase the value of the property.

How did you find this deal and how did you negotiate it?

I met the lead investor, who negotiated the deal, @ Lifestyles Unlimited.

How did you finance this deal?

Non-recourse agency loan.

How did you add value to the deal?

This deal was plagued with problems starting about 6 months in. I don't want to go into too much detail, but it started out paying 12% annualized distributions for 3 quarters, and then they ceased for the remainder of our ownership. Fortunately, we bought it at a really good price and enjoyed a nice tail wind from cap rate compression, so it was like a bad marriage with a happy ending.

What was the outcome?

Invested capital: $1,000,000
Total money distributed from this project: $2,262,000
Total return of the project: 226%
Invested period: 4.5 years approx.
Annualized return: 28% ROI

Lessons learned? Challenges?

Be sure you know who you're investing with! Ensure your values are aligned with theirs and that you're comfortable with their integrity, ethics, competency, and transparency. Get references from passive investors in prior deals if possible.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No, as I was a passive investor.