Thanks so much for taking the time to respond to my post guys! It's
obvious you all have more experience and knowledge than I do, so it's
really helpful for me to hear from you. I think it would be helpful to
explain my situation and my goals a little better:
I have a
full-time job as a physical therapist, but I am really slow due to
Covid, so I'm not making much. My goal is to quit my PT career and
syndicate apartments full-time. I know this won't happen over night, but I'm trying to figure out if I can make a living in the next year. It seems that by investing my own money in each syndication I complete, it will take 4-5 deals before I'll be making enough off of the asset management fee and the return on my capital invested. I currently have 3 small apartments- 16 unit, 8 unit and 10 unit- all purchased in the past 8 months. I've purchased these with family/friends and we've purchased them in an LLC. I have about 50% ownership of each. They were distressed properties and I'm still working on getting them turned around. I a couple more months, I should be cash-flowing around $2k/month.
@Jaysen Medhurst: You ask, "Why would anyone write you a check for tens or hundreds of thousands of dollars, when you're not willing to invest in it yourself?" That's a great question and I think most investors would think that way. But, isn't that the point of syndication? The general partners/syndicator provides the deal (and everything that goes into that) and the limited partners/investors provide the capital. So, the answer to your questions is: Someone would write me a check because they have extra money to invest but they don't have a deal in which to invest. They decide they like the deal that I am providing. They believe I'll make them more money. I, the syndicator on the other hand, don't have a bunch of extra money, but I have a great deal. I still agree with your point, and I do plan to invest in my first few syndications at the very least, but I'm still trying to think through this.
So, let's say I have $100,000 of my own money to invest. But, I want to live off of this money (while still making some money as a PT) while I transition into full-time apartment syndication. If I invest in each of my own syndications, I could do 2, maybe 3 deals like the one I outlined in my OP. If I am fortunate enough to close 3 deals in my first year, I'll be extremely excited, and well on my way to apartment syndication success, but I'll have made very little to support my family. In year two, the cash flow will start to increase and I'll be closer, but still far away from my goal right? Also, I definitely won't have enough money to invest my own capital in my 4th or 5th deal. I guess at that point I'll have a much better track record, so potential investors will be more likely to invest with me even if I don't invest my own coin.
Thanks again for your input!
