Real life syndication feedback? From investors and syndicators

[Monica C.]

I think it would help everyone curious about syndications if we shared how syndication investing has really been like for those with experience. 

Have your investments met projected returns? What have you been happy or unhappy with? What have you noticed that syndicators were doing well or poorly on? Also sharing if you're a syndicator yourself and what that journey's been like, especially for newer syndicators -- what were some surprises good or bad that you've experienced during your first couple deals? How would you have done things differently?

I personally have invested in a couple syndications in the last 3 years and none have been completed yet. Things I value more now is communication and transparency. I have investments that send on-time quarterly reports with documents like rent rolls, expense reports, detailed explanations of whether we are in line with initial projections or not and if things have been improving or not and why. I do think a clearer visual on these metrics would be great and clear number comparisons, as otherwise I have to do calculations myself and go back to pull up the initial offering memorandum to compare numbers. As an investor, the numbers seem to be the easiest way for me to check if things are going well although I understand the bigger picture is more complex than that. I have one investment that sends very sparse updates with not very specific details on things like numbers but rather more generalized descriptions about how things are going. I happen to know someone on the operating team more personally, so would hear more detailed updates if I reached out, and felt that these details would be appreciated by investors if they shared them more frequently. I imagine that when details are not shared, operators may feel it's tedious or unnecessary to share with investors or they're not confident with what is going on? I'd love to hear how syndicators decide what to share and what not to share and how much details investors would like to know. 

[Steve S.]

@Monica C. I have invested in a couple of dozen syndications with about 10 sponsors across a variety of asset classes in different areas of the country. I found most of them through real estate podcasts. If I like what I hear, I will go to their website to schedule a call to interview them to see if our investing philosophies align. There are several sponsor questionnaires available online. Always ask for their track record of full-cycle deals. I also ask if they can reduce their minimum on my first investment with them. If I have gotten to know, like, and trust them, I will get onto their deal list and vet their offerings. Ultimately, I would like to invest in more deals with a smaller number of sponsors as I see how their deals (that I have invested in) perform. Good communication before, during, and after a deal has gone full cycle is important to me as well.

Some of the podcasts that I have found to be helpful in finding syndicators include The Real Estate Guys Radio Show, The Passive Wealth Strategy Show, Passive Investing From Left Field, and The Cash Flow Connections Real Estate Podcast.