Syndication - anyone part of pipelines like Lane Kawaoka?

12 Replies

Looking to expand my portfolio and possibly invest in some syndication opportunities; does anyone have any experience with those and what to expect over the beginning, and long term?

I'm on Lane Kawaoka's e-mail list and I always think about striking out for something, but wondering if its worth it or if it can turn into a house of cards...

Originally posted by @Joe P. :

Looking to expand my portfolio and possibly invest in some syndication opportunities; does anyone have any experience with those and what to expect over the beginning, and long term?

I'm on Lane Kawaoka's e-mail list and I always think about striking out for something, but wondering if its worth it or if it can turn into a house of cards...

It depends on the opportunity, the syndicator, the total amount of money involved, the amount you want to invest, how long you want to invest it for, the location of the apartment complex, the number of units involved, what your goals are. There are great tax write offs if that is what you need and most passives are getting about 8% cashflow in a well run syndication. 

When there is "value add" in the project the returns are much higher but you wait about 5 years and hope the market doesn't change in the meanwhile. The money is "tied in" (you can't get it out if you need it) for the length of time for the project. Projects can lose money. It's an investment and no one can guarantee what the future holds.

It is likely that in most markets away from the west coast, they will see growth in population and increase in values. I'm looking at an opportunity in Texas and another in Arizona. I've gotten to know the syndicator, the methods and the underwriting used. I typically sell single family houses as Turnkey's to investors from California and to offset the profit by buying into an apartment complex to get the tax write offs makes a good deal of sense. Your mileage may vary.

Every deal is going to be different. I would get familiar with a few sponsors and their underwriting. It is important to be sure they align with your goals and that you feel they are a right fit for you. 

https://www.biggerpockets.com/member-blogs/10145/83067-limited-partner-s-guide-to-investing-in-the-right-deal

https://www.biggerpockets.com/member-blogs/10145/73373-opm-how-to-syndicate-with-success

https://www.biggerpockets.com/member-blogs/10145/72118-syndication-the-ins-and-outs-of-real-estate-syndication

@Joe P. your questions are based in fear and it's probably something that can be solved through education. I have an entire podcast dedicated to passive investor fears and almost everyone i've talked to had some sort of fear that they had to educate away. I honestly believe that the cycle isn't finished and there are still good deals to be had, but you can determine that for yourself by doing some research. 

As Account Closed said, all investments have the potential to lose money, but you also don't want to sit on the sidelines forever. If you don't like the idea of giving up control, being an active investor might be better for you. 

It's all about what your comfortable with @Joe P.

As @Todd Dexheimer mentions, get on a few more lists, research the sponsors you are interested in that meet your criteria. 

It appears that you are ready to participate passively. You're already half way there. Now just determine what you are willing and comfortable doing to proceed to the next step. It seems like you are looking for someone to push you and say just do it but its a personal decision at the end of the day. It's investing!

Thanks all for your comments. My only real fear is the proverbial house of cards -- I don't recall the name but I believe a different syndication guru recently and losing an investment entirely is what concerns me. It feels different than active investing, which I have currently with my duplex.

I'm certainly not looking for the "push" but more so the information to feel comfortable about it. I am already subscribed to Lane's e-mails but again, checking to see if any BP investors are actually with him and have been for a period of time, and could describe the level of comfort, level of return, communication policies, etc.

@Lucas Miller  I'm sure he is, but that's giving him a ticket to find his biggest fanboy or fangirl and having me talk with them. :)

I'm looking for the unsolicited opinion of someone Lane himself wouldn't call on for their experiences (I'm big on listening and chatting with folks), just to get a sense of what deals they've gotten involved in and how they've gone so far.

Originally posted by @Joe P. :

@Lucas Miller  I'm sure he is, but that's giving him a ticket to find his biggest fanboy or fangirl and having me talk with them. :)

I'm looking for the unsolicited opinion of someone Lane himself wouldn't call on for their experiences (I'm big on listening and chatting with folks), just to get a sense of what deals they've gotten involved in and how they've gone so far.

@Ian Ippolito   you may want to get on Ian's mailing list  he is wicked smart and does very deep dive's into crowd funding and other syndicated investments then writes reviews on them..  

@Joe P.

Regardless whose list you get on, you need to do your own due diligence on a person first. Read their profile, check their references, and reviews. Also as you receive their emails, determine whether you like reading their content. Does their strategy resonate with you.  Do the reverse check to see if you can find anything on them. 

Here's a post to help you ask the right questions when dealing with a deal sponsor:

https://www.biggerpockets.com/member-blogs/10850/76728-questions-to-ask-a-syndicator

@Joe P. I would urge you to not have a call with me and talk to my investors. This requires coming out to real events with real investors. Internet chatter is a good starting point but most of my investors say the gold is going deal and taking relationships offline. 

PS lets have a chat and get to know each other (any other investor). My feelings are hurt that you did not want to connect with me :( after three years on my list.

Originally posted by @Lane Kawaoka :

@Joe P. I would urge you to not have a call with me and talk to my investors. This requires coming out to real events with real investors. Internet chatter is a good starting point but most of my investors say the gold is going deal and taking relationships offline. 

PS lets have a chat and get to know each other (any other investor). My feelings are hurt that you did not want to connect with me :( after three years on my list.

Don't take it personally. Even my wife says I'm way too cautious, especially on matters of money :)

I'm establishing myself more as an investor at this point (finishing up a BRRRR) but I could see syndication being an important part of the portfolio, hopefully in the near future. I'm sure we'll be in contact.

Be careful with that BRRR stuff.

I personally would not do Remote BRRR as there is just a lot of risk with 1) risk of embezzlement with contractors 2) change orders and 3) bank doing bait and switch doing a lower appraisal and/or LTV on the refinance.

Most service providers net worth is under 500-1M net worth and I just did not feel comfortable working with them because they would screw me over when I wire over 30-50k checks to do work.