Just wanted to share a bit of my journey, back in 2015, I was shifting away from my turnkey rental portfolio (11 rentals) towards syndications and private placements. My initial ventures were with people I thought I knew well. But let's be real, you never truly know someone until you've invested money with them.
As a new investor, I often found myself without accredited investor buddies to help with due diligence. This meant sometimes invest with those who are with great marketers or those with influencer connections, rather than the most solid operators. Honestly, it's a learning curve. I stumbled upon operators with less than $1 billion in assets, and lost money with a few of them. 1 out of 5 were a dud investment.
Over time, you start building valuable relationships with other passive investors, and that's when things begin to turn around. Your hit rate improves, and you gain better insights.
Now, about your idea of spreading investments across 20 deals with 5 to 10 operators: I get the logic. If you're doing a deal every quarter, that's four a year, and in about five years, that's a neat cycle of 20 deals. It's a solid pipeline.
But managing 10 different operators - that's a lot and my guess is that you are pretty much dating everyone or putting in test bets. In my experience, most LP investors in syndications start by casting a wide net. Then, as they figure out who's really delivering, they narrow it down to fewer than five trusted operators.
Hope this perspective helps a bit in your investing journey!
