Have you flushed a $100 bill down the toilet yet? I'm slightly kidding, but not much... An old RE mentor of mine said, "You aren't ready to invest in rental property until you can flush a $100 bill down the toilet without thinking about it." That was 18 years ago. Inflation being what it is, that's probably $500 now, and of course that will clog the toilet, which means you'll have to call a plumber and pay him $300 to clear the line for you... All of which is a normal day in the world of real estate investing.
If you're going to do syndication, multiply that amount of $ "flushed" x 10.
I'm not here but bust your bubble: you seem like a spirited young man ready to make your way in the world, and that's good. We need guy and gals like you who are spitfires and ready to take on the world. But I'm also a realist. Syndicate is hard. Really hard. And sometimes you screw it up. Doing it right is even harder. There are reasons why people get paid $200,000 to put together a syndication, maybe 1 person in 50,000 is really good enough at all the moving pieces and parts to make it happen.
Full disclosure: I have not syndicated a deal myself, but I do my own deals with private money, and I also have two other guys with whom I regularly collaborate who do syndicate and who have solicited my funding in the past. I will tell you this: they lost $35,000 of their own money on their first deal when it didn't pan out and the investors pulled funding due to things that weren't really the syndicators' fault. Bad timing, a dishonest seller, and some twists of legal hurdles that we thought could be overcome turned out worse than expected. Ran out of time and opportunity to close the deal, and the money partners scattered, as was their right under the syndication. Money spent was money lost.
It's not a business for the meek or for the broke. Syndications involve millions of dollars, and no one will want to back you if you aren't willing to back your own project. That means throwing your own money into the deal. On a smaller project (<= $5 million) I can't imagine investing in any syndication unless the syndicator(s) themselves were willing to contribute at least a 5% stake. Anything less tells me they don't believe enough in the project and/or don't have enough experience to do a deal. On a larger project, you might get away with only 1%, but now were talking 10s of millions of $.
Let's say your "smaller" project is $5 million. Something like a nice little 60 unit apartment complex. That means you as the syndicator would probably need $250,000 in the deal-minimum-to inspire confidence in your investors.
Now if you don't have that money yet don't give up. First, I suggest helping out an experienced syndicator on a few deals and get paid in knowledge and experience mostly. Meanwhile, sell 40 houses, live like a starving agent, and save up your cash stake for the future deal.
How will you convince an experience syndicator to let you do grunt work on their deal? Lunch/dinner is a place to start. You may have to make your pitch to 10-20 folks before finding someone willing to give you a shot. Remember how we talked about flushing $100 bills? Here's your chance to see if you're prepared to spend money without any guarantee of making any.
Meanwhile, there are books to read and YTs to watch and podcasts to listen too, but most are going to be heavy on high-level and hype and low on nitty gritty, daily details. Raising Private Capital by Matt Faircloth is a good starter for how to raise money, and it works for small deals too, so even if you don't end up syndicating, you can at least start doing some smaller deals on your own. Good luck!
