Anatomy of a Real Estate Syndication-

A Real Estate group, also called an Operator/ Sponsor, seeks to acquire an asset to add to their portfolio increasing their AUM assets under management or to grow via full-cycle transactions of buying creating value and selling the asset. The asset may be an apartment complex, mobile home park, or a Self-Storage facility.

After the asset is secured or under contract, the team will conduct inspections, perform due diligence, and negotiate a purchase agreement. In addition to their own investment and that of friends and family, the team may require further funding to acquire the asset and carry out the necessary renovations.

This is the opportunity for the individual investor to join in the investment. The Investor can leverage the operator's expertise to access high-growth markets and projects. They will receive an excellent risk-adjusted return in a highly tax-advantaged cash-flowing asset. Both strategies are available via Syndication, Whether for capital preservation or wealth generation.

General Partner and Limited Partner

The team managing the project and dealing with all the risks is the General Partner. The Note is in their name. 

The Limited Partner (individual investor) has no say in the process, and risk is limited to invested dollars. The LP receives all relevant documents from performing its own analysis before funding.

The LP invested funds are ahead of the GP. Investors get paid first.

The Strategy-
 The operator aims to enhance the asset's value by implementing market-grade renovations and improvements to attract higher rents and lower expenses. This will increase cash flow and significant returns for all involved parties.

The PPM (Private Placement Memorandum) is the guiding document for the Syndication. The PPM includes the business plan. The strategy (how the team will create value by attracting higher rents through renovation and reducing operating expenses). It also covers financials and proforma estimates for the exit plan. It includes timelines and how long they anticipate holding the asset. And lastly, it includes the target payout to investors. An important note here is that investors will review the PPM that is submitted to the SEC.

The GP works to Stabilize the asset. They may rebrand and make necessary renovations and physical improvements. The improvements will enable higher rents, and they will continue to reduce/manage expenses. The Investor receives monthly distributions and updates on the progress. The team implements proven management processes to optimize asset revenues and control expenses for value creation. They execute the plan outlined in the PPM. As the renovation continues through the individual units, the rents increase. Cash-flow increases

Exit-

At the time of acquisition, the team plans for possible exit strategies. Based on the project’s success, the team may decide to cash-out refinance, hold the property, or sell it off.

The investors receive their return on capital and profits per the terms of the agreement. Many offerings provide an opportunity to share in the equity event.

The team looks to re-invest. These Investment opportunities or Syndications are available only to Accredited Investors and some Sophisticated investors per rules set by the SEC and, therefore, seldom advertised.

We provide 3rd party independent analysis of the project, business plan, and financials. We physically walk the property before investing. Our group has had 26 full-cycle projects (acquisition to exit). What kind of return are your investments targeting for the next 36-60 months?

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