Syndication Sponsor/KP onboarding

[Kyle Church]

Hello BP Family! I had quick question with regards to onboarding experienced sponsors/KPs, what quality or traits do you consider in Sponsors/KP (Key Principals) when bringing them on to a deal? and my Second question is what percentage of equity should be provided to the Sponsors/KP as result of them putting their name on debt sourced for the deal to close? Please keep in mind that this would be one of my first big deals in the acquisition of a 160 Unit town home complex. Based on that knowledge I know that not all sponsors are made equal, and sometimes not all sponsors flow with the deal you are bringing to the table. However, I am willing to give a nice equity split on the acquisition to the CO-Sponsor/KP, however I don't want to completely be slammed by them having a much higher equity share than my company. 

I look forward to all your feedback and recommendations! 

[Paul Moore]

Hi @Kyle Church! I think you are saying that you are bringing the equity to someone else's deal. If that this the case then you are certainly asking the right questions. It's critical, absolutely critical, that you take the time and effort to carefully vet the syndicator. Investing with a bad syndicator is certainly the largest risk in a deal like this. A great syndicator can make a mediocre deal go well, but a mediocre syndicator can ruin any deal. 

You should read @Brian Burke's excellent book The Hands-Off Investor to learn how to evaluate syndicators. This book has over 300 pages of details you need to learn before moving forward. 

I also recommend joining a community like Jim Pfeifer's Left Field Investors. Groups like this will help you see what other investors are saying and provide you a better chance of making a good decision. Good luck and happy investing!