Mortgages & Creative Financing

Real Estate Syndication with Single Family Properties

Expertise: Real Estate Investing Basics, Landlording & Rental Properties, Real Estate News & Commentary, Mortgages & Creative Financing, Real Estate Wholesaling, Personal Development, Flipping Houses, Business Management, Real Estate Deal Analysis & Advice
180 Articles Written
real estate syndications for single family houses

I have written a number of blogs in recent months about alternative methods for acquiring real estate investments. This is a pertinent topic for many investors because of the stringent requirements for conventional financing and the difficulty many investors face when trying to obtain financing.  For those individuals that have the ability to bring multiple investing partners together to buy real estate, putting together a syndication may be a great option.

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

Real Estate Syndication Basics

In short, a syndication is simply a pooling of funds between multiple investors as a tool for acquiring or investing in real estate. Most people associate syndications with large commercial deals, but this does not necessarily have to be the case. I have a friend who is in the process of putting syndications together for single family properties. Interestingly, he lives in the U.S. as a foreign national and is unable to obtain conventional financing. After striking out with numerous outlets that claimed to have financing for foreign nationals, he decided he would take matters into his own hands and find other investors to put up the cash.

In most syndications, there is a manager who forms and organizes the syndication. In return for the work of creating and managing the syndication, there is typically some sort of fee or additional ownership given to the manager for their efforts. My friend structured his syndicates such that three investors put up all of the cash to buy a single residential investment property and the syndicate was split into four equal ownership interests. Essentially, my friend was able to own a 25% share in the property in exchange for finding the investment and organizing the syndicate with the 3 other investors.

For those individuals who don’t necessarily have the cash to buy property right now, but do have the ability to find deals and organize small pools of investors – using this kind of quasi-syndicate method may be a great strategy.  While some people may turn their nose up at syndicating on such a small level, I think this kind of creative thinking is what makes investing in real estate fun and interesting. Whether you’re buying one single family house or a million dollar commercial property, don’t miss out on this incredible opportunity to profit from cheap real estate combined with creative real estate investing strategies.

Ken Corsini G+ is the host of the Deal Farm Podcast (on iTunes) and has 10 years of full-time real estate investing experience...
Read more
    Ronald Cagape
    Replied over 8 years ago
    The challenge with syndications is getting handle of personalities and egos. I know a lot of small syndications go sour because of unmet expectations and pressures when challenges arise. That said, anyone who can round up cash will have a definite advantage and this is one technique that I’m looking at implementing.
    Replied about 8 years ago
    I am currently organizing a Reg D PPM to raise somewhere around $3-5M over the next 12 months, investing in real estate located in California. I am a broker and attorney that owns and operates a small property management company, but am new to raising capital. My question would be what are my options regarding financing in order to introduce leverage into the real estate purchases. I can probably swing 10% returns for my investors with all cash purchases, but I could jump the profits tremendously if I could then go get a loan. The banks would not likely entertain a newly formed LLC with no history. Any thoughts?
    Tom Wilson from Saratoga, California
    Replied 3 days ago
    Hey Ken, thanks for throwing light on this topic.