3 PROFIT CENTERS FOR MULTI FAMILY

It is crucial that as a Real Estate investor that you have ready access to all the ways to earn money so that you will be able to take advantage of the opportunities present in the current Real Estate market – and one of the best possible ways to do this is through the process of syndication.

Real Estate Syndication is simply a term that refers to the concept that a group of Real Estate investors will pool together their funds and invest the money that they have garnered into Real Estate projects. So as a Real Estate investor, it is vital that you keep looking out for ways and means to syndicate opportunities that arises from the market. This is simply because if you successfully syndicate Real Estate deals, you will actually be able to increase your property portfolio and earn profit in a variety of different ways as outlined below …

Acquisition Fees

Being a Real Estate syndicator will allow you to tap into a lot of potential income as you often receive compensation for finding the property that multi-family investors want to invest in. Ranging anywhere between a spectrum of 1% to 5% of the total acquisition costs, or perhaps being a flat fee (e.g. $20,000), acquisition fees are usually negotiable with the other Real Estate investors that you are collaborating with during this deal. After all, if your fees are sky high, then it is certain that the majority of investors won’t be so open to investing with you. However, bear in mind that actually finding and structuring the deals do take a lot of time and effort, so be sure that you are compensated fairly.

Asset Management Fees

One other stellar method on how to profit from multi family syndication is to be receiving an asset management fee. Typically, the asset management fee is approximatley 1% of the total gross revenue. You will be paid this as it is your role as being the syndicator to not only be actively managing the property, but to also syndicate the partnership too.

Cash Flow

Lastly, the final profit centre for multi-family syndication will be through the compensation of equity participation. The amount of cash flow that you will be receiving could lie anywhere within the spectrum of 5% to 50% as it ultimately depends on the details surrounding your deal and of course, the level of experience that you have. It is likely that your investors will be receiving a minimal rate of return of about 8% to 12% on their invested capital first, with the rest of the equity being split between all of you at whatever share you all initially agreed upon.