All Forum Posts by: Steve S.

@Abhishek Nayani It sounds like you are new to syndication investing. The first thing you should do is educate yourself on this investment class. There are so many things you should be looking at before getting drawn in by the potential return metrics. Start off by reading some books like The Hands-Off Investor by Brian Burke and Passive Investing Made Simple by Anthony Vicino and Gino Barbaro. There are plenty of podcasts on passive investing as well. I think another key to not getting involved with sub-par sponsors is to join a community of passive investors. Learning from other investors' experiences can save you hundreds of thousands of dollars. I made so many mistakes early in my syndication investing that I wrote a short book about it. DM me and I'll guide you to more resources.

@Richard Nassour Are you looking to syndicate deals or are you looking for help analyzing deals as a passive investor? If you want to be on the active side, Michael Blank's spreadsheet is thorough and relatively inexpensive (at least it was 6-7 years ago). If you are a passive investor and want a tool to help vet deals, then DM me.  

On the passive side, I agree with @Stuart Udis that the sponsor/operator is the most vital part of vetting a syndication deal. In terms of level of importance, I like to say that the operator is 80% and the deal itself and the location are 10% each. 

@Dan Goeckel For LPs, I would recommend Passive Investing Made Simple (Anthony Vicino, Dan Kreuger) and then move on to Brian Burke's The Hands-Off Investor. 

Tiger 21 is a group of ultra-wealthy individuals with a minimum net worth of $10 million. If you look at the aggregate asset allocation of its 750 members, they have 49% in real estate and private equity and the rest in public markets and cash. This was not by design, but my investable capital is ~50% in my 401k and 50% in private syndications. https://tiger21.com/insights/asset-allocation-report-2021-1s...

@Kristi Goebel Congrats on starting your REI journey! I have invested in real estate syndications for 14 years and have learned a lot of lessons. One of the most important things to being a successful in syndications is to belong to a community dedicated to passive investing. When I started, I knew no one who was investing in syndications, and I suffered some losses. Now, I have a large network of passive investors with whom we bounce off ideas about sponsors, deals, and asset classes.

I would also suggest reading Passive Investing Made Simple (Anthony Vicino & Dan Krueger) and The Hands-Off Investor (Brian Burke). These books will give you a solid foundation on syndication investing. 

In terms of podcasts focusing on passive investing, listen to The Passive Wealth Strategy Show, Invest Like a Billionaire, and Passive Investing From Left Field.

DM me if you want more info about my community.

I would consider pref equity ("A share") in solid, cashflowing multifamily syndications. To diversify, consider ATM funds and business equipment funds. I have been getting monthly cash flow from these investments in addition to bonus depreciation. Self-storage funds and industrial, triple-net lease funds will also help you to diversify, give you some bonus depreciation, and will get you monthly/quarterly distributions. Get involved with a passive investing community that discusses these topics all the time. DM me if you want more info.

I'm not sure about now, but with crowdfunds like Crowdstreet and Fundrise, you may not have much direct access to the sponsor. To me, that's a key component of investing in syndications. Communication is vital in passive investing.

@Bob Willis I have done both and would highly recommend passive syndication investing over lending for the reasons mentioned by @Taylor L. Although my monthly returns from lending may have been steadier, my average annualized returns have been bigger with syndications when you take into account the upside potential at the sale of value-add deals. Plus, the tax advantages are better with K-1 returns since they are considered passive income. Private lending or lending through a syndicated debt fund is better suited in a self-directed IRA/401k in my opinion.

@Vincent Plant To start your journey in passive investing, you have to educate yourself before wiring money to these syndicators. Many of us passive investors are burned-out landlords who have a busy W-2 but still want to invest in real estate. Read Brian Burke's book, The Hands Off Investor. Learn about syndicators/sponsors by listening to them on podcasts that cater to passive investors like The Passive Wealth Strategy Show or Passive Investing from Left Field. To really accelerate your journey, join a community that will educate you about passive investing and will enable you to network with passive investors. I'll DM you a link.
 

Quote from @Trevor Oldham:

I'm looking to invest in my first deal as an LP and upon interviewing GP's each makes their deal sound as if it's the best deal ever. What do you look for when investing as an LP and are there any red flags to watch out for? 

Obviously, when starting out investing in something new, you need to educate yourself. A good start is to read some books on passive syndication investing like Brian Burke's The Hands Off Investor or James Kandasamy's Passive Investing in Commercial Real Estate. There are also multiple podcasts that cater to this type of investor like Passive Wealth Strategies for Busy Professionals, The Real Estate Syndication Show, and Passive Investing from Left Field.

Also, get involved with a passive investing community where you can network with other like-minded investors. This will help you compress time frames and ramp up your knowledge.