Starting a Syndication at 21 (NEED ADVICE)
Investor · Boston, MA · Member since 2022 · 39 posts · 17 votes
Starting a Syndication at 21 (NEED ADVICE)
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes@Lorenzo L. Why would someone listen to advice from a 21 year old who has never bought a deal before? They shouldn't !!! Appearing on podcasts, posting content and doing webinars won't qualify you either. Why is there this sudden pressure to syndicate. You are 21, there is no rush.
What ever happened getting a job, perhaps even real estate related if that is an interest or passion. By your own admission you are not interested in sourcing acquisitions or capital raising, so get a job working as a property manager or in operations for a real estate company. Learn the business (and by that I do not mean assist diligence on another GP's deal for free and get awarded "CO-GP status" to run with). Seek out a W2 position working in the industry. Save up some money, buy your first few properties organically and once there's experience and the start of a balance sheet go out and raise money from friends and family if you are still interested in the business. Do right by them and word spreads, momentum is built and eventually you are raising money from PE firms, family offices etc. if you care to grow beyond your personal network's means. That's how this business used to operate for those who cared to scale beyond a passive endeavor.
Now syndications have become a team sport intended to mislead. If duties were merely split between operations, capital raising and deal sourcing based on individuals strength and to spread responsibilities, I would be more understanding but that's not the new age model. Now a 21 year who have never owned real estate is being told jumping into syndicating is a good idea. As Charles even noted, If you do a good job with building sponsor relationships, then you can probably get to the point that they'll allow you to use their track record. This goes a long way when you're trying to find deals or to attract capital because nobody really wants to be anybody's "first" in this business. If you have to embellish your credentials to raise money and are actively being taught this is how to syndicate, this should be called out.
Raising capital, appearing on podcasts, creating misleading social media content & finding deals are now used as tools to create credentials out of thin air. Anyone interested in being an LP in syndications should familiarize themselves with forum threads like this so they can ask the appropriate questions before making investments. I am not part of the PassivePockets community but I hope members are being taught to watch out for these practices.
32 Replies
- Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes1y
You'll figure it out. When most of us were 21, we were thinking about stuff other than real estate.
May want to check out @Jered Sturm's path as he started in real estate during college and now is a syndicator.
- 1yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votesThe first paragraph says it all. 21 is SO young. A full adult lifetime ahead.
Quote from @Mike Dymski:
You'll figure it out. When most of us were 21, we were thinking about stuff other than real estate.
May want to check out @Jered Sturm's path as he started in real estate during college and now is a syndicator.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1yI agree.
Quote from @V.G Jason:
Quote from @Lorenzo L.:
@Don Konipol @Joe S. @V.G Jason @Chris Seveney @Nicholas L. @Stuart Udis @Robby Sanchez @Nick B. @Charles Seaman
Thank you all for the feedback! I truly appreciate it.
I want to reword my thoughts:
I now know I can't just raise millions of dollars because I want to. I need credibility, either through working for a couple of years for a company or buying my own property, starting small, and scaling with time.
Now, my plan is to graduate next year (Im a junior), and get a job in a firm as an analyst in order to build that experience and mainly cover my living expenses, while on the side buy my first small property and go from there.
However, and this is where I start overthinking, I still have 1 year left in school and I want to use it to my advantage as I don't have any expenses or responsibilities other than school yet, and I want to do my first deal. Now, I am currently interning with a boutique developer in Boston focused on multifamily and my plan is to not only learn from them but also try and do my first deal in partnership with them. So i'll either find the deal or find the money.
What do you guys think of this?
Am I rushing too much? The thing is I've been learning about real estate for almost 2 years and still haven't bought my first property and it's driving me insane . And I understand that i am college kid with no money or experience but then you see people like Rob Beardsley who dropped out at 20 and bought a 200 unit property through syndication and then you think, hm, maybe its possible.Who the **** is Rob Beardsley? For every Rob Beardsley there's 1000s of flops, and for all I know he may be one.
You have people on this board bigger and better than Rob Beardsley. Quit comparing yourself.
Two thoughts, I'm sure you heard of the first:
1) Comparison is the thief of joy
2) Fast solutions have slow problems
You go as fast as slow as you can. It's a simple as that. The answer to my question is you find the deal.I can refute your reputation, I can refute you who you fundraise from, I cannot refute a truly quality deal. However, I can refute your ability to manage a truly quality deal, in essence your experience or lack thereof.
You need to iron your deficiencies to manage a great deal. Do you know what they are? Cause ****, I don't think you do. You don't know what you don't know. I need to evaluate you on how you failed when you failed, and if you haven't failed yet have a quality deal I need to evaluate your ability to manage risk, headwinds and blind spots. Do you know what they are?
So you need some tangible experience + very quality deal + communication skills to present to the investors. Then the money comes.
Mark zuckerberg, bill gates and steve jobs also dropped out of college. It is much easier to also grow a company when you have someone who starts it with a boatload of money behind you. Does the original poster have someone who can do that like some of the people he mentioned did? Oh he probably does not know that... He just sees some kid who makes it sound like he came from nothing and runs all these syndications..
7e investments53 Reviews - Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes1y
@Lorenzo L., sales 101, if you don't believe in yourself and your ability to execute no one will buy what you are offering.
So, yes, start buy building a network of people to invest. It will be a constant grind of content creation, and continuing to learn and regurgitate your learnings into digestible content.
Finding a deal is great, but a) no broker/owner will actually award you the deal without having surety that you can close (so without a strong network, you will never actually get a deal) and b) even if you find the best deal in the world AND have it tied up, the timelines are too short to be able to start building your network from there.
What I would do is get a job in real estate to learn the ropes while being paid. Work for an owner operator. If you want to do multifamily, apply for PM roles, underwriting roles, etc within larger groups. Yes, this will be an entry level job, but it gives you experience, gives you income to be able to even start buying single family rentals, if you want, gives you connections in the industry (not always investors, but people you may need later on).
- Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes1y
Start talking to investors before you lock up a deal. A common rhetoric is "if you find a good deal, the money will come"..in my experience that is false. Start building a network of potential investors that are interested in your investment thesis.
Also, what is your edge? Why would someone invest with you over someone that has been doing it for a long time? You will want to nail down what your investment thesis is, buy box, and why you are better at that investment niche than others
- Member since 2020 · 6 posts · 3 votes1y
Quote from @Lorenzo L.:
Hello all,
I'm looking to buy medium to large-scale value-add multifamily using OPM.
I am wondering if my first steps (past the education part) is to build a network of people who know, like, and trust me through posting content like newsletters, articles, podcasts, doing webinars, going to events (aka build my brand), or, should I first find a deal and then raise capital?
The reason why I ask is because I'm sure some people are going to say it is critical to first build a network but I find myself doubting myself because why would someone listen to advice from a 21 year old who has never bought a deal before? Also, I am connected with a lot of sophisticated investors on Linkedin and I don't want to lose their respect because I am starting to post educational content when I have never done any transactions.
What do you guys think? Am I overthinking?You are correct.. don't educate when you lack ETHOS (trust/credibility). You can still network but focus on adding value in the relationships which might be, exactly as you stated, finding deals or connecting moneymaking opportunities and people. Wholesaling as you said is perfect, instead of trying to build a following of people who trust someone your age/experience. edit: to clarify, you said "find a deal then raise capital" I say yes, find a deal as a wholesaler, the first step. then later maybe after doing that a few times you can raise capital and have some sort of trust with ppl since $ is trust-based.
- Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes1y
A few things:
1. Post on social media what you're learning. "I met with a seasoned real estate investor today and here are the top 5 takeaways...". "I went to a conference today and learned about x, y, z."
Also, post industry articles. Post questions. "What is your take on the current state of the multifamily market?" "Who is a buyer in today's market?" "Fixed rate debt or floating rate, what is your preference?"
2. You need to be taken seriously in all aspects. With no experience, you will have a tough time finding deals, finding private equity, and finding financing. So, gain experience. Do that by buying smaller deal first and working your way up, or find partners with just a little more experience than you and fill in their gaps.
I'm going to use this question to record a podcast episode that I will release next Thursday on my show, so if you want to hear more of my thoughts check out the show. Pillars of Wealth Creation.
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