Would you believe to be a good idea for a beginner who hasn't done any deal yet to partner up with a more experienced syndicator and give up all equity to him? I was thinking on how to get around the first deal blockstone and this solution is the fastest I can think of if it is achievable. Basically the beginner would be trying to get the deal and the investor doing all the heavy lifting, they'd trust the beginner a lot more since he'd be the partner of the more experienced syndicator, deal closed and the beginner's track record is born. I'd love to hear your thoughts
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
5y
If you bring the deal, you should get a piece. It doesn't necessarily need to be a huge piece, as there's a lot more to do in delivering a syndication. But people you're in business with should recognize the value of bringing a good deal to the table. You deserve to be paid for your results.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
5y
If you bring the deal, you should get a piece. It doesn't necessarily need to be a huge piece, as there's a lot more to do in delivering a syndication. But people you're in business with should recognize the value of bringing a good deal to the table. You deserve to be paid for your results.
@Taylor L. sounds pretty good to me! But would a gp actually guide me through the whole process even if my job would be done after finding the deal? Because if he didn't I'd build a track record but I wouldn't really know what to do to close a deal by myself, that's why I thought about giving up all my equity: for him to actually explain to me how things work
Real Estate Syndicator · Portland, OR · Member since 2014 · 453 posts · 312 votes
5y
@Mike Edwin
One thing to take into account as well is the lender requirements. Even though you may do your first deal, if you don’t have a track record and net worth requirements that many lenders require you may be partnering or needing a partner for some time while you get started. Best thing is to start making relationships and figuring out how you can help!
Investor · Westchester, NY · Member since 2014 · 96 posts · 57 votes
5y
If you have active involvement in the syndication (i.e. found the deal) you should be receiving a GP promote even if . Check the Michael Blank deal desk guidelines as a good waypoint. They will bring the equity (taking most of the deal) if you bring them a deal that hits their criteria. Of course it is not guaranteed they will invest so best to tee up the economics and relationships with them or another sponsor well in advance.
One thing to take into account as well is the lender requirements. Even though you may do your first deal, if you don’t have a track record and net worth requirements that many lenders require you may be partnering or needing a partner for some time while you get started. Best thing is to start making relationships and figuring out how you can help!
I guess my partner will be doing the lending part?
Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
5y
Hi @Andrea Pagano. Investors should want to know that you have a stake - something to gain or lose - as you bring the deal to them. That is why it would be best for you to get a piece of the GP. And why it would be best for you to have cash in the deal as well. If you stay involved, and you should, when things get rough, it will be important that you have a stake in the game when making hard decisions.