Apartment Syndication is NOT a Business Model

[Ben Leybovich]

Syndication and apartments, in general, is an opportunistic play. Most things being sold don't make it past the most cursory underwriting.

ow did syndication become a model? A model implies a system, and I think of a system kind of like a conveyer belt: push the button - spit out a widget - push the button - spit out a widget, etc.

Syndication is the exact opposite of this. It's a one-off, here-and-there, once in a while above average opportunity.

How did we get to a place where syndicating $10M assets has become as automated as flipping $150,000 houses?

I am bullish as all get-up on the apartment sector. But, a lot of nonsense is going on...

[Brian Burke]

The missing piece of the puzzle is relationships. You don’t find the best deals buying marketed properties...yes you can find them but they are few and far between, as you said.

The real deals are the rebounders, where the buyer they picked fails to perform and the deal comes to you after. Or the off-market deals—not the fake off-market crap that is simply using the “off market magnetism” to find a sucker for an overpriced property, but true off-market stuff that only comes to you if you have a proven track record with the broker.

Over time you will develop these relationships but you’ll have to close a few more deals first. Then you’ll see how this not only becomes a business, but how you add significant value to your investors by unlocking access to deals that they couldn’t have found on their own.