Looking for Good Quality RE Syndication Sponsors

[Rich Lavery]

I plan to make passive investments through real estate syndications and/or private equity funds that invest in real estate.  The asset classes I'm most interested in are self storage facilities and mobile home parks.  For anyone who has read Brian Burke's book, "The Passive Investor," you know that the most important take away is that the sponsor is more important than the deal itself.  There are a million sponsors out there on sites like Crowdstreet, but I'm hesitant to jump into that.  I'm asking those in the BP community who have had experience investing in syndications or private equity to chime in with recommendations on sponsors / companies that you feel fully confident in.  I'm looking for strong track records through different market cycles.  Although I'm most interested in self storage and mobile home parks, I would also consider multi-family, though I'm less bullish on this asset class considering where we are in the cycle right now.  Any input would be appreciated.

[Matt A.]

@Rich Lavery - Brian's book is a great start, in fact I was invested (adn still currently AM invested) with Praxis long before the book came out. The road-map is essentially in those pages, adn I presume that you are looking for opinions on companies from current / former investors. MY opinion of Brian's company is solid - they under-promise and over deliver. While Im an information junkie, I would always like to see more into what the sponsor is doing, however the quarterly reports are factual, and while I was a bit disappointed with some of the quarterly numbers, there were clear explanations as to WHY that was the case... and a plan to correct them. When the last fund went full-circle adn I looked at overall returns I was again reminded of why I chose that - it simply was fantastic!

I also recently placed some capital with another operator (fairly large one from Indiana that responded a couple days before me above)... and will see how they perform. In full disclosure I also spent a couple years watching them pretty close before committing capital as well. As for my third company - they are rather unique in that not too many people seem to know about them as they dont appear on anyone's podcast, however I've had a personal relationship for over 5 years now (Invested with them over 3), they offer ONLY notes and evergreen funds, and DLP Capital has roughly 3+ Billion or so AUM. 

Personally I tend to look for very established track records, low-profile (Not looking for the guru's or podcast types, flashy social media, etc.) - someone focused on the business. Its been my experience that a lot of the guys mentioned in previous responses have a pretty interesting business model where they offer some level of "training', then for those that actually have paid some significant sums the next hurdle is getting to their Rolodex (by offering these "elite" students part of the GP in exchange for raising capital)... when ya sit back and actually run the numbers its a pretty good model for the master sponsor. I only hobbled across this as I specifically reached out to one of the named individuals above and was met wiht some very curt "I wont talk to you, but you can speak with the person who refereed you) type language... needless while Im not going to tip a 100MM scale investment, If someone that is ultimately asking for MY investment wont take a few minutes to speak directly to me, well I think you get the picture.

There are a LOT of new sponsors to this game, adn its often the subtleties that you have to find to ferret them out with. Look VERY carefully at all documentation - speak with the legal council, look for VERIFIABLE information. Im amazed at how many folks want to literally pull a fast one to raise some capital and move on, never to be heard form again. As has been said, "the Devil is int eh details".  Good Luck!