Passive LP syndication Training

20 Replies

Hello all, 

I've been working with a great (expensive$$!) mentor learning Multi Family syndications. I've fallen in love with the commercial side of real estate, way easier to project returns, solid large business projects, ect ect.. Unfortunately for me, Life just hasn't gotten me to the point where I can really participate in syndications. I'm working hard at changing that, and hope to be raising money in the next 12 months for other peoples deals (South Florid is a competitive market and hard to find your own deals that make sense).

During this adventure, people around me have been very interested in learning about and investing in syndications. They are rightfully overwhelmed looking at spreadsheets, projections, ect by themselves. The mentorship i'm part of is a single level, 100% program. From newbie, to being a General Partner. Its very expensive, time consuming, and way too much of a program for people that just want to be knowledgeable Limit partners. 

Does anyone know of a parred down course/mentorship available that focuses on JUST being an LP. Perhaps a mentorship that has 2 levels, LP training and GP training... That would then open up the LP's to a group of GP's ready to take their money?

Thanks for your feedback!

You're going to think this response is useless and not helpful. but if you're going through an expensive and extensive training to learn General Partnership, why don't you teach them? teaching the layman's version of what you do and what they do will help reinforce what you learn and help educate them in an easier than giving them someone else's course to follow. imagine a 30 minute conversation with you vs  an hour going through a slideshow. Is there anyway doing this could also establish your credibility? 

I'm not sure who you are working with for mentoring.  What you are seeking already exists.

I've been a member of Lifestyles Unlimited for a decade.   Lifestyles Unlimited provides education and mentoring in single family and multifamily buy & hold real estate.  They have been around over 30 years, and have a complete curriculum for LP (Passive) investing.  The goal is to ensure people understand syndication and know how to evaluate the deals the see.  They also have a complete curriculum for GP (Lead) investing. That curriculum focuses not on all aspects of evaluating, buying, and operating a property as well as all the SEC rules regarding the mechanics of putting together a deal.

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@Matthew Thurman - I'm not 100% sure I understand your question correctly.   Are you wanting to educate your future LP investors about how deals and syndications work?  If so, I completely agree with @Austin Johnson and think this would be a perfect why to establish a relationship with your investors and show them that you are extremely knowledgeable regarding this types of investments.  I have these conversations with my investors all the time and share with them basic information regarding syndication and explain future investment opportunities.  

You can do this yourself the same way.  I've chosen to do it through a daily podcast and weekly newsletter and blog post.  Yes, it is an investment of time and money, but I get to reach different audiences and great feedback!

If you have any questions about this, please let me know! 

I've seen some ebook's out there on this subject but can't recall where.  I agree that vetting syndications can be tough for someone who isn't familiar with all of the terminology.  A big part of the DD on a syndication has to do with vetting the operator. As other's have mentioned, maybe you can explain it to them which would be a great way to build rapport. 

Thank you Austin! I agree completely... But I've already spent hours on the phone with a good friend of mine. He is wrapped into some high income individuals with tons of disposable income... Well worth training and developing a relation ship with at all costs... however, many of the others that express interest do not have the same potential today (not discounting them in the future though)... And honestly, at this point in my life, I have very limited connectivity half the year, and am traveling to remote locations 6+ months a year.... Adding in training most everyone that is interested and it becomes a burden I can not take on at this point.... The end goal of this hard work is freedom from my difficult W2, that will come in 12-18 months at my current rate... Then I FULLY plan to do exactly as you say, I love teaching and love seeing people around me be successful! But at this point, I need a way to show others the benefits of syndication without loosing my very valuable time.

Greg, Thank you! sounds like lifestyles is exactly the type of course/training i'm looking for. What is the cost there? Being a member for a decade is a pretty big testimate!

Have you thought about making a PowerPoint presentation with just slides or videos and your company logo on each slide? it would be two birds, one stone. free up your time while also establishing a name for yourself. of course use references to others (maybe reference @Sam Wilson 's podcast as a way to learn more? I've listened to it before, it's solid). I'd be hesitant on giving money to others to educate your investors. Then again I'm a newbie in syndication so what do I know. 

@Austin Johnson , I actually have put together some material already. That however is not nearly enough to keep people from getting into trouble. I've made some boneheaded mistakes in my career, thankfully a buoyant market and easy monetary policy kept me from loosing money (although I did a ton of sweat equity and STILL did not beat the S&P over the same period). I worry about many syndicators right now. I see projects that will be successful if the market trajectory stays on its current course, but are not likely to meet projections if there is a moderate downturn. That's not always easy to spot from an outside perspective, someone that is new to real estate, AND new to syndications..... A few hours of speaking with me is not going to get enough knowledge to fully recognize these pitfalls...  The reason I mention professional mentorship is that it has done SOOOO much for my knowledge and investment. I've learned more through my network and webinars that I attend via my new network than I ever did in the 100's of books i've read.  I will check out @Sam Wilson s podcast though! 

@Matthew Thurman good to start thinking about education before investing.  It does take some upfront education and energy to commit to become an informed LP prior to investing in syndications.  There are several places on this forum and others that can point you in that direction.  As a serial limited partner myself I have certainly put in my share of time on education, but it is time well spent.  I am now focused on helping to educate other investors to become an informed LP, as the syndication environment right now is like the wild wild west with so many syndicators out there, and is as important now as ever to be an informed LP.  Many syndicators have rode the market over the last few years, but have not really been challenged at least as of yet...

@Matthew Thurman It sounds like you have a pretty common issue. No time to commit plus location dependent means you need some sort of online program.

In today market, sadly, LPs need to be more educated than the GPs since most GPs have only been doing this for a few years so chances are they don't know much more than you, but they put on a good show. You are smart to educate yourself and protect your most valuable asset, TIME. most are worries about losing money in a deal but the reality is, the industry is pretty robust so worst case is you make less profit than you intend but that means your capital is tied up in a low returning deal for 5 yrs or more vs in a better deal by a stronger GP. So to protect your time, you need to spend a little time on the front end to get educated and avoid the numerous overly rosey (bad) deals out there.

You're thinking is just fear. You don't need to provide your passive investors with a big education. They need to know the basics. Stop showing them spreadsheets and analytical data. Instead tell them the story. Why passive real estate, what are you buying, what are returns (super basic level), what is your business plan. Pictures and graphs help show the story and possibly a short video. 

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@Todd Dexheimer I agree and disagree... The people I'm referencing are already investors. Some in residential real estate, some in crypto, some in the stock market... They are not going to leap into a new world without significant knowledge. For the vast majority of people i'm networking with, I agree completely. There are those that want a full understanding, the nuts and bolts (i'm one of them!) before they relinquish control to a GP.... And personally, I'm glad those people exist, If i can get their approval and investment dollars, then its a huge vote of confidence and will surely lead to more business... These are good friends that I would love to get trained up, even if its not by my hands.

Originally posted by @Matthew Thurman :

@Todd Dexheimer I agree and disagree... The people I'm referencing are already investors. Some in residential real estate, some in crypto, some in the stock market... They are not going to leap into a new world without significant knowledge. For the vast majority of people i'm networking with, I agree completely. There are those that want a full understanding, the nuts and bolts (i'm one of them!) before they relinquish control to a GP.... And personally, I'm glad those people exist, If i can get their approval and investment dollars, then its a huge vote of confidence and will surely lead to more business... These are good friends that I would love to get trained up, even if its not by my hands.

Yes, I thought that way as well when I first started. 

There certainly are people that want to be super knowledgeable before they invest with you, but the vast majority just want to know enough and trust those they're investing with. I typically find those that want to gain all the knowledge, are the ones that want to be a syndicator themselves. 

@Matthew Thurman , I agree with Todd that you are likely overthinking things.  Creating any type of course should be most valuable to your median investor, and be considered valuable to about 80% of the people who look over it.  If you cater it to the 1%, you will put over 90% of the people into analysis paralysis.

And those that you mention want all the information are best handled one on one anyways.  So back to you limited time: if an online, recorded course can bring in 80+% of your network, that frees up your limited time to spend more time with those few that will want you to go into the weeds with them.

With the high likelihood of being reprimanded by the Moderator, I mention that the Sumrok organization (Yes, I am student, but NO, I do not work for Brad!) does have a lower priced passive only training/networking option called Foundations.  As this is information and NOT a SALES PITCH, I leave it at that!

Regards,

Charles LeMaire

@Matthew Thurman I think you could pull this together yourself using websites, books, and podcasts. Sites and podcasts like The Left Field Investor, The Real Estate  Crowdfunding Review, The Real Estate Syndication Show, and a dozen others would be helpful. @Brian Burke ’s excellent BP book, The Hands-Off Investor would be perfect.  You could develop simple Q&As or study guides for selected chapters or episodes etc.  Good Luck!  

Originally posted by @Paul Moore :

@Matthew Thurman I think you could pull this together yourself using websites, books, and podcasts. Sites and podcasts like The Left Field Investor, The Real Estate  Crowdfunding Review, The Real Estate Syndication Show, and a dozen others would be helpful. @Brian Burke ’s excellent BP book, The Hands-Off Investor would be perfect.  You could develop simple Q&As or study guides for selected chapters or episodes etc.  Good Luck!  

 Great advice but I think Brian Burke's book is extremely lengthy. When we think about potential investors and busy professionals that want to get into real estate, most do not have the time to take 2-3 months to read a lengthy book solely on passive investing. Also- it's important to realize the passive investor does not eat, sleep, and breathe real estate like we do! There are plenty of other bite size resources out there as well. 

Just my opinion!! 

There is quite a bit of free information out on the subject. Some good book resources mentioned as well as podcasts. You will also find every syndication group worth their salt, freely records podcasts, writes blogs, creates videos or produces content to help empower a person to be a LP. 

However, I've always found it's those investors who take the time to look of their own accord who will always be the more successful as an LP. Bring the information to them without their request, and often they will run the other direction. 

Many of the large syndication groups have entry programs which are good at providing the content at a cost for an LP. Many of the medium sized syndication groups provide it for free. Search Podcasts or Google on syndication, then find the website of the group or syndicator and I assure you courses exist if needed.