Originally posted by @Justin Gottuso:
@Philippe Schulligen
Thank you for the link to your article. The chart was helpful to see how commercial properties out perform other investments. I also read your one on the step by step updates to investors which was helpful in seeing the process works on acquisition. Do you know of any statistics on how often syndicated deals actually perform over time? Promises of doubling your investment in 5 years/15-20% returns seems too good to be true, yet also worth researching more.
I think the economies of scale of multi family and not having a single vacancy or repair eat up all profits in a year are very good reasons to go with larger multi family units. I’m interested in doing this in Columbus/Central Ohio ideally.
What did you do before your first syndicated deals? And what experiences and knowledge are essential to being successful as a Sponsor of a syndicate? What do you recommend investors look for in a syndicated opportunity and what to avoid/bad signs? Thanks!
Thank you for your feedback on the article, I am glad it helped.
I don't know of global statistics on syndication performances. Every deal and every type of deal (ex. stable vs. value add) will offer different returns on paper and each deal may hit these numbers or not. I can only recommend to ask sponsors for their track records. We can discuss my experience offline.
I don't know the Columbus market, but it is decent size for its MSA (Market Statistical Area): 300,000+ people. I would certainly recommend not going below 200,000. For selecting you market, you may also want to look at population / job growth and major employer diversity. When broker prepare an property offering memorandum, they include information about the market and sub-market that you can double check on the web easily.
My background is the aviation industry, with a degree in engineering. Besides books, podcasts, etc. I learned about multifamily and syndications taking a course and more importantly I had the opportunity to partner and be coached by experienced multifamily syndicators.
Looking at a syndication opportunity, the experience and track record of the team involved (both sponsor and property manager) is probably the most important factor: ex. 1000+ doors minimum and several deals in the market where the property is located. A note: very experienced syndication groups tend to close the door to non-accredited investors and place the minimum investment to enter a deal at a high level.
P.
