Apartment syndication for beginners

25 Replies

Hello All,

My name is Amanda. I am a real estate agent in Chicago. I purchased my 2-flat a couple years ago and have been on a journey of building my own portfolio but would like to learn more about apartment syndication. I’ve been listening to Joe Fairless and John Casmon etc podcast. I plan to purchase Joe Fairless book soon. I am currently not an accredited investor. 

What would be your advice for a beginner interested in being an operator. How can I as a real estate agent bring value to an operator right now? 

I look forward to hearing from you all. Thanks 

Can you help raise capital or underwrite deals?

@Amanda Tompkins you're off to a good start! I'm one of Joe's coaching students, and I've (of course) read his books and highly recommend them. Keep picking up books and listening to podcasts, that's a great way to get information.

Step back and see what resources you have at your disposal, as a realtor. You probably have a big network of real estate investors and homebuyers who have additional funds for investment. At some point can you approach them to gauge their interest in investing? (Note: I have no idea if this is against the rules set down for realtors, so check on that)

If you already have off-market deal flow in apartment buildings, that's a fantastic resource. If you're good at negotiating with sellers, perhaps start a direct mail campaign and get that off market deal flow going. 

You don't need to be accredited to invest in syndications. Just need to track down operators who accept sophisticated funds, build relationships with them, and evaluate a whole lot of deals. 

@Chris Tracy I’m learning how to underwrite deals better. I’m interested in raising capital. 

@Amanda Tompkins

Welcome to BP community! You're off to a great start already by taking the steps in the right direction and listening to the two good podcasts. @Taylor L. gave you a good feedback, so follow that. 

I think once you read Joe's book and have a better understanding of the process of how syndications work, you will have a good grasp of where you can bring value. The most important thing to keep in mind is that syndications are SEC regulated and hence it is absolutely critical to get educated first prior to taking any action!

Another good book was written by a securities attorney Gene Trowbridge "It's a whole new business". So read this one as well. In addition, there's a podcast specifically dedicated to syndications by @Whitney Sewell . I think it's called "real estate syndication show". Subscribe to this one as well. Last but not least is to surround yourself by people in the industry via local REI events and by going to conferences. Since you're in Chicago, you should check out one that's coming up locally to you that John Casmon is putting together: http://www.midwestresummit.com/

My best!

@Taylor L. thank you very much for your reply. This was very helpful. I come across off market deals quite often and I do have a network of investors who may be interested. That’s great advice to get the off-market deal flow going! Thanks 

@Alina Trigub thank you for your response. I will look into all the resources you mentioned and definitely do more research on SEC guidelines and maybe connect with a securities attorney. 

Yes, the summit by John Casmon seems like a really great event. I definitely plan to attend. 

@Amanda Tompkins I would take a step back and first figure out who you want to get involved with. There are a lot of great operators, but there are also a lot of lousy ones. You need to thoroughly vet anyone you're going to partner with. 

From there, you can raise money for someone's deal, you can put down an earnest money deposits, you can sign on loans, you can put together investor presentations, etc... All these things need to be done and if you can get good at it, GP teams will reward you with equity. It's all about finding where you can fit in and contribute to a deal

One thing you might be able to help with is lead generation. Generally, a percentage of the GP is allocated to the person who finds the deal. 

Another option is to raise capital.

@Lucas Miller Great advice. I will definitely take my time to vet any potential partners. At this stage I am analyzing what resources i already have and how i can utilize that to contribute where I can.

@Theo Hicks Thank you for your response. Lead generation and raising capital are definitely two options that could work in my situation. Thanks

Originally posted by @Amanda Tompkins :

Hello All,

My name is Amanda. I am a real estate agent in Chicago. I purchased my 2-flat a couple years ago and have been on a journey of building my own portfolio but would like to learn more about apartment syndication. I’ve been listening to Joe Fairless and John Casmon etc podcast. I plan to purchase Joe Fairless book soon. I am currently not an accredited investor. 

What would be your advice for a beginner interested in being an operator. How can I as a real estate agent bring value to an operator right now? 

I look forward to hearing from you all. Thanks 

 Amanda,

I have acquired over 1,000 apartment units and I have a very good operation out in Cincinnati Ohio (although I do have properties in other states).

You're asking a very good question that a lot people who approach me for "mentoring" don't ask. As a result, I tell them NO - even if they offer me money - because my time is just too valuable.

Having said that, here's my answer to your question "How I can add value to an operator?"

There are only 2 things a successful apartment operator needs:

  1. We need more DEALS; and
  2. We need more MONEY to acquire those deals

If you can find more deals and learn how to raise capital, then you can add value to an operator.

Now, you might be saying: "If I can find the deals and raise the money, then I can be an operator already, right?!"

WRONG.

Being an apartment syndicator-operator takes a lot more than finding deals and raising capital. The "secret" sauce is finding a property not favored by the amateurs (or the majority of real estate investors), finding the value in it, and having the guts, strategy and the leadership skills to make the deal happen.

Here's an example deal I did - a 48-unit apartment building with only 8 units occupied and how I turned things around such that I sold it for over a $1 MILLION profit 6 years later. Not many investors here can do what my team was able to accomplish.

Here are the details:

https://www.biggerpockets.com/forums/311/topics/644570-how-i-made-over-1-million-on-1-deal-after-6-years-of-headaches

@Michael Ealy Amazing work...that was so inspiring! Thank you so much for your insight! I know being an operator takes a lot of work and skills and won’t happen over night and that’s why partnering with experienced and knowledgeable operators and learning the business is important to me! 

We asked the same question after trying to get LOI's accepted but to no avail.... turn out no-one cared we were going to flip 200 houses this year- they wanted to know about our MF experience. That being said, we vetted multiple sponsors and partnered with 2 to raise and deploy capital with. We have closed on 32mm in assets this year with another 34mm under contract. It truly helped us "cut the line" and get involved in these deals in a big way

Amanda, there has been some great advise up till now, I would add one element, think about hosting meetup events. They are a great way to interact with your target audience. You can put sponsor events and bring in specialists, such as attorneys, CPA's etc.

Learn what the business is all about. Then figure out what part of that business you truly love doing, then find a partner to complement you with the stuff you don't like doing. 

From there, invest passively in other operators deals and learn how they are operating, find a mentor who is practicing what you aspire to do and become. Lastly, which is something you should be doing always, find out who is interested in your network and educate them, kind of get to learn it twice because if you can teach what you learned, your essentially teaching yourself as you learn how to talk about it in all ways and forms. Good luck!


It depends on you and your goals. Certainly you can get started by reading books, listening to podcasts, doing small deals, partnering with others, working for a company to gain skills, etc. This will ultimately get you there, but may take a while (not necessarily a bad thing)

You can also hire a mentor, join a mastermind and/or purchase a course, while doing the above. This will help get you there much faster. 

It still comes down to your motivation, mindset and beliefs. 

Here is an article on getting started in apartments:  https://www.biggerpockets.com/member-blogs/10145/70092-getting-started-with-apartments-with-no-skills-and-no-money

Absolutely understanding the underwriting of a deal including how capital stacks are formed will be helpful to any deal. I suggest reading about GP's, LP's, leveraged returns, and equity waterfalls to get started!

@Steven Libman thank you for sharing your experience and congrats on those deals. Partnering sounds like a great way to get started. 

@David Danforth hey David...hosting meet ups is something I definitely considered doing. I think it will be very helpful. 

@John Fortes awesome advice. I definitely want to learn everything about the business and seek mentorship. 

Passively investing in deals will also help me learn and give me credibility. 

I appreciate your advice. 

@Chris Fi I’ve been doing a ton of research on the things you listed above. Thank you 

@Amanda Tompkins

With the position and skills you have as a real estate agent I think starting out with lead generation on deals and brokers for a GP share would be a good start. That way you can start to get some hands on experience with a pro investor while still learning about other aspect.

@Josh Oaten thank you for you response. I definitely think that’s a great start. 

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