Syndicate or Buy privately ?

15 Replies

So here is my question...

What do people think is a quicker way to financial freedom-

Using 100k cash to buy in/invest in a syndicated commercial deal

or use it to brrrr,

or use it to as a down payment on two turn key rentals?

Thank you, Sam! I could certainly be actively involved in a reno/rehab.  If it were in my area, I have connections for contractors and handymen. 

I know eventually, I want to get into large commercial apartment buildings and corp. offices, but I only have so much money to start now. If I were to jump into a syndicate, my biggest concern is tieing up all my capital in one deal. Thoughts?

Originally posted by @Michael L Sakey :

Thank you, Sam! I could certainly be actively involved in a reno/rehab.  If it were in my area, I have connections for contractors and handymen. 

I know eventually, I want to get into large commercial apartment buildings and corp. offices, but I only have so much money to start now.  If I were to jump into a syndicate, my biggest concern is tieing up all my capital in one deal.  Thoughts?

 if you syndicate, your money will likely be tied up for 3-5 years, 2 at the lowest, and 7-10 on the high end...

You can make money in both ways. If you like to control your own destiny and invest in yourself then BRRR. If you want to leave it to the expert in apartment syndications then go that route.

Me personally, if I had $100k to invest I would not go all in on syndication or even 2 different ones. I would go 10% of my net worth. Should something go bad it would not hurt me. In your case going 10% of $100k is not enough to invest in syndication.

@Michael L Sakey - BRRR will give you the most flexibility. If you are doing it locally than you're likely in tune with trends, path of progress and what is a "deal". It could give you some transactional capital to invest in longer term passive income projects.

@Michael L Sakey

$100k cash would be considered very "cash rich" to the average person on the street. But unfortunately in the world of real estate it's fairly "cash poor".

The advantage of BRRR when you are cash poor is that you can put in sweat equity and if you pull it off successfully then you make more than you would through either a syndication or turnkey rental. So if your goal is which offers the quickest potential route to making the most money, then that is most likely it for you.

However, potential is not the same as actuality. The disadvantage of BRRR is that it takes a lot of time, self-education, work and effort. And if you are just starting out, you may make some expensive mistakes. Also, you may not make any mistakes but just have the bad luck of the market turning on you, or a lot of unexpected capital expenditures, etc.. If any of those happen, you would've been better off choosing an experienced syndicator operator who has a lot more experience than you could ever hope to have, and perhaps even diversified into a more properties than you could on your own. But of course, this comes with a lower return.

So really, the best answer for you will depend on your risk tolerance and how much time and effort you are willing to put into things.

@Michael L Sakey

I agree with what @Ian Ippolito and @Frank Wong said. 

If you want to make money you have to be active investor which can be achieve through BRRR. By putting your sweat equity into it, you will be able to make money and learn along the way. And who knows eventually you may do your own syndication deals as well.

More importantly you need to educate yourself first on whatever strategy you chose. Make sure you understand what you're doing and take action!

Best!

Fastest way: BRRRR

But the ideal strategy is based on your time commitment and current expertise. 

If you don't have a lot of time or experience but want to eventually syndicate your own deals: passively invest in syndications

If you don't have a lot of time or experience but want to eventually invest in your own smaller multifamilies: turnkey rentals

If you have time, I would do BRRRR.