Looking into my first syndication

9 Replies

Hi,

I got introduced and interested in real estate investing a few months ago, and have been exploring several options (SFR, syndications, multi-unit). I am currently considering a syndication deal with Ashcroft capital and was wondering if folks here have worked with them before (I did see a couple of references to them on the forums) and what your experience has been like? Also on a more general note, how do people go about vetting a syndication firm? That seems like the hardest part when going this route, and I would love to learn more about navigating this.

Hi Krishna,

I have personally invested both as LP and GP alongside Ashcroft on a few deals. My experience has been great, but maybe I’m biased so feel free to ask around and get comfortable with whatever sponsor you end up investing with.

Here is an article I recently wrote on Vetting Multifamily Syndicators:

https://www.biggerpockets.com/blogs/9859/73520-vetting-multifamily-real-estate-syndicators

I hope this helps. Happy investing!

@Krishna Monian I don’t have experience with the firm but I’m sure other folks on the site can help you with that question. 

As to your second question on vetting syndicatation sponsors, there is a great forum thread on the topic here:  https://www.biggerpockets.com/forums/432/topics/503289-how-to-vet-syndicators?page=1

What’s most important is track record. How much experience does the sponsor have, how long have they been in business, how have their deals performed (and do they even have any full-cycle deals), what have they done when things didn’t go according to plan—all of those are topics to explore. 

Another topic is key-person risk. This means “what happens if the one person doing everything dies?”  Having depth on their bench means that the other key folks can steer the ship to port minus one crew member. Solo operators put your cash at risk.

Everyone is a syndicator now—so look for groups that have survived a market cycle or two—and who have fully-cycled deals. And realize that sponsor selection is one of the most important decisions you will make—a good one can produce the best possible result in the face of adversity. A bad one can screw up a perfectly good real estate deal.

I invest with Ashcroft as well and am pretty familiar with their process. PM me if you'd like to discuss further. I'm also involved in their most recent 2-3 projects.

Hi! @Krishna Monian How to vet a syndication group is an excellent question! It's not always about track record, which is a common misconception. I would say it's more about the team.

For example, our firm uses professional property management groups for "on the ground" operations + a national property management firm that manages the ground operations team. And lastly, we manage the national level. This 3-layer asset management provides great transparency to our investors and ensures that nothing is slipping between the cracks. This is just one example of having a high-quality team; the takeaway is to vet the TEAM as much as the deal itself. You could have the best deal in the world, but if the team is weak or limited, the deal could go south quickly. Best of luck! 

I agree with all the above comments about vetting the sponsor, the shared articles are a great place to start. I've worked with Ashcroft and found them to be great! Would be happy to answer any more questions you have by PM.

@Krishna Monian Another positive statement about Ashcroft as I'm an investor with them as well...Joe and Frank are great to work with and very transparent with their deals. Always get a monthly update and always available for questions. The monthly returns are nice too! :-) PM me if you have more specific questions. :-)