What is real estate syndication? 

In real estate syndication, we partner with other like-minded investors to pool our money together to buy properties such as apartment buildings which generate monthly cash flow and go up in value over time. By doing this, it allows us to buy a property that we as an individual could not afford on our own and also receive the benefit of professional management. Imagine being able to tell your child that you have already saved enough money for their college education without having to take away from your current lifestyle. 

How Does It Work? 

With real estate syndication, you are able to participate in a low-risk investment without having to be an expert in the field of real estate or be a hands-on landlord. The sponsor of the syndicate will find, negotiate, and manage the property on behalf of all the investors. One important factor you must pay attention to is the sponsor’s background, experience, and track record before investing with them. You want to make sure that the sponsor has successfully completed similar projects in the past and has a good relationship with his previous investors. 

As an investor in a real estate syndicate, you will own a percentage of the property based on how much money you invested. The amount of equity ownership does not determine your percentage of return on investment (ROI). Your ROI is determined by the distribution agreement set forth in the Private Placement Memorandum (PPM). The PPM is a document that outlines all the important details of the investment including but not limited to:

• How much money needs to be raised
• What type of property is going to be purchased
• What is the expected ROI, what are the roles and responsibilities of each party involved, etc.

Investing in real estate syndication is a great way for parents to save for their child’s future without sacrificing their current lifestyle. If you are looking for a low-risk investment with great potential returns, real estate syndication may be right for you. 

Do your due diligence and research different sponsors before investing with them. And always remember, past performance does not guarantee future success.