Strategies for Building a Syndication Client Base

[Dan Bitner]

Hey BP Community,

I’m currently scaling my multifamily syndication business, and I've hit a familiar milestone. I'd love to get some insights from the experienced capital raisers and operators here.

A bit of context: I don't solicit investment on a deal by deal basis. Rather, I set up each client with an online account that pays 8% annually / interested credited daily (not unlike a typical online savings acct). I can then leverage the pooled capital for investments in privately funded commercial real estate deals, and clients can maintain semi-liquid accounts via ACH deposit & withdrawal. My profit is the spread between the interest paid to clients and the ROI received from our development partner at the time the deal closes.

Up to this point, I’ve successfully tapped my immediate networks (friends, family, and colleagues) as well as my "near" networks (LinkedIn and Instagram). It's given me some initial traction, but I know that to scale, I need to build a predictable, repeatable pipeline of new, accredited investors outside of my personal sphere.

For the active syndicators out there who have successfully crossed this bridge:

• Outreach Channels: What top-of-funnel channels are yielding the highest quality conversations for you right now?
• The Transition: What was the biggest hurdle you faced when shifting from raising capital from people who know you, to attracting strangers who trust your brand—and how did you solve it?
• Capture Strategy: Are you using any specific lead magnets that are highly effective at getting prospective investors onto your email list before they ever see a deal?

I’m eager to learn what systems are actively working for you right now to help adapt my outreach model. Happy to share what we've learned about structuring our early materials, as well if that'd be of use. Thanks in advance for any thoughts offered!

[Chris Seveney]

Raising capital today is the hardest it's been in five years, especially if you're trying to raise for multifamily, because all you have to do is look at these forms or other places. What is the constant theme? Multifamily investors having capital calls are losing their entire investment. The amount of trust in the multifamily space right now is at an all-time low, and investors are not investing in multifamily.

This has also impacted other types of offerings because people have taken such a beating in the multifamily space. They thought they had that money that they could use once the property was sold, which is now gone. The amount of money people have to invest today in these types of offerings is significantly less than what they had five years ago. 

The options you have are:

1. You can spend tens of thousands, or even a hundred thousand dollars per month, on paid ads, hoping that will work. Spending a few hundred dollars a month will get you nowhere.

2. You can also hire somebody with a track record and experience in raising capital, but expect to pay that person $200,000 per year and an OTE of approximately $350,000. Realize it will take 6 to 12 months to start bringing in capital and probably 2 years to get to a decent monthly capital raise

However you do it, expect to spend significant money on bringing it in