Specialist · Salt Lake City, UT · Member since 2018 · 8 posts · 2 votes
I'm studying to build syndication business, I want to be on the active side of syndication which I believe is GP? I really want to take some syndication course sometime soon, but I need to have this question cleared. 1. Do I need to be earning certain number of income? 2. Do I need to be a accredited inverter? 3. Any course recommendation? Thanks to everyone in advance for your help! I love BP Nation!
Gene Trowbridge has a 1 or 2 day seminar (believe he's still doing it).
I would also recommend picking up his book, "It's a Whole New Business"
As many others have said, you need the up front costs to get it going; earnest money, security filing and PPM packet creation, and other minimal start up costs. Once you close the offering you will be reimbursed but you need to front these expenses which can run 20k to over 100k depending how large a property you buy.
Don't know that you're ready for this yet based on your questions. Learn what it's about and start off investing in someone else's syndication first to learn how it goes or if lucky you could be part of an experienced sponsor's GP to learn even more. Just have to make sure you join a GP the right and legal way.
Bottom line, talk to every sponsor you can find to talk to and keep reading and attending events to get there. Syndicating is hard and made even harder by trying to rush. Don't fall for someone telling you that "oh, that's easy" because it most certainly is not.
You do not need to be accredited to do syndications. However, as @Caleb Heimsoth said, you will need money to close deals. Check out www.syndicationschool.com
I'm studying to build syndication business, I want to be on the active side of syndication which I believe is GP? I really want to take some syndication course sometime soon, but I need to have this question cleared. 1. Do I need to be earning certain number of income? 2. Do I need to be a accredited inverter? 3. Any course recommendation? Thanks to everyone in advance for your help! I love BP Nation!
What are you already good at? As the GP, what are you bringing to the table which the passive investors will value?
Probably need to get much more information. Check your local multifamily RE clubs, listen to several of the good pod casts. Read the volumes worth of posts on the topics here on BP.
@Kyohei Yoshida You should start by educating yourself on what syndication is about and who the parties to a syndication are. Start by reading "Best ever syndication" book by Joe Fearless and Theo Hicks as well as "it's a whole new business" by Gene Trowbridge. While being accredited is not a requirement, it will put you in a much better position if you reach such status. And of course as others mentioned you need to have access to at least $50K of capital or more.
@Jerel Ehlert Thank you for the advice. I've been listening to podcast like Whitney Sewell, real estate guy, real estate espresso, and of course BP. I just started finding blogs about syndication on the forum which I'm excited about. Also, I'm going to read books that's more focused on syndication.
Gene Trowbridge has a 1 or 2 day seminar (believe he's still doing it).
I would also recommend picking up his book, "It's a Whole New Business"
As many others have said, you need the up front costs to get it going; earnest money, security filing and PPM packet creation, and other minimal start up costs. Once you close the offering you will be reimbursed but you need to front these expenses which can run 20k to over 100k depending how large a property you buy.
Don't know that you're ready for this yet based on your questions. Learn what it's about and start off investing in someone else's syndication first to learn how it goes or if lucky you could be part of an experienced sponsor's GP to learn even more. Just have to make sure you join a GP the right and legal way.
Bottom line, talk to every sponsor you can find to talk to and keep reading and attending events to get there. Syndicating is hard and made even harder by trying to rush. Don't fall for someone telling you that "oh, that's easy" because it most certainly is not.
@Bruce Petersen Wow, great advice. I appreciate that. If anyone says "investing in real estate is easy " I will show you a liar. Hard work includes deep preparations. Do you know if there are anyone like "guru" I should be careful for?
@Kyohei Yoshida there is a ton of free resources out there to get the equivalent of a Masters in this space. Read Joe Fairless's book as many have mentioned. Its the best one Ive read by far. also his podcast is very good and detailed information about the business.
In regards to your question about Guru's yes there are some predators out there and there are legitimate coaches and educators as well. You can spot the bad guys by the "free seminar coming to a Hotel in your town soon" pitch. My advice would be to educate yourself first, attend some, Multifamily meetups, investor groups first then maybe some paid conferences and workshops but not sales pitch fest events. The more you learn about the business you will be able to spot the sharks.
It isn't a requirement to have money, but it is ideal to invest money into your own deals to create alignment of interests. As an investor, would you invest with someone who has no skin in the game?
@Kyohei Yoshida Get the Best Ever Apartment Syndication book by @Joe Fairless and @Theo Hicks Check out his Best Ever Pod Cast and absorb everything he and @Theo Hicks are providing on the subject. That's what I'm doing currently. Best of luck to you.
Consider Brad Sumrok. He has an Eco-System membership network with hundreds, maybe thousands, of trained individuals, both sponsors and passive investors. He has made 200 of his students millionaires. The group did 52 deals last year and 42 so far this year (mid July). The deals are nearly all 60+ units and mostly 100+ unit properties usually with minimum passive investments of $50K, sometimes $25K and $75K.
A mentor is not required, but they provide a quick start to how it is done and avoidance of the mistakes you don't want to make.
1. Do I need to be earning certain number of income? The funds needed to be the sponsor include the syndication costs (attorney) and the likely hard money for the seller; the deal will need to be guaranteed, but you can enlist investors to help with that. As a passive investor, see next.
2. Do I need to be a accredited investor? Most of the deals are Reg D506(b) so there is no income limit as a passive. But you must have a preexisting substantive relationship with the sponsor to invest in a Reg D506(b) deal.
3. Any course recommendation? Suggestion above! Read the books mentioned. Also Old Capital pod casts.
@Kyohei Yoshida To be a syndicator you do not need to be an accredited investor and you don’t need to make a certain income. The first step is to learn as much as you can about the business; read books, attend courses, and network with people who are already doing what you want to do. Look for a multifamily investing meetup in your city.
Matt, Kyohei gave some good input. If you have the ability, rolodex, to raise Capital, you may consider engaging an Attorney to assist with the structure. If you don't have the ability to do that and need others assistance in raising the Capital, then her idea is spot on. There is a guy by the name of Joel Brock that teaches quite a bit on this topic. Look him up.
The syndication business isn't something you learn through podcasts and you cannot pick up a manual to make it work. Those resources can give you a high level view of how the business work in general, but you need to seek out a professional training program with mentorship. If you're serious, do your investors a favor and DO NOT SKIMP on your education. The financial underwriting process is very serious and big dollars are at stake. You will also increase your odds of a successful start if you take the time and build a solid foundation.
The syndication business isn't something you learn through podcasts and you cannot pick up a manual to make it work. Those resources can give you a high level view of how the business work in general, but you need to seek out a professional training program with mentorship. If you're serious, do your investors a favor and DO NOT SKIMP on your education. The financial underwriting process is very serious and big dollars are at stake. You will also increase your odds of a successful start if you take the time and build a solid foundation.
Good advise could you point someone in the direction of that? I’m not far away as well.
I'm studying to build syndication business, I want to be on the active side of syndication which I believe is GP? I really want to take some syndication course sometime soon, but I need to have this question cleared. 1. Do I need to be earning certain number of income? 2. Do I need to be a accredited inverter? 3. Any course recommendation? Thanks to everyone in advance for your help! I love BP Nation!
I love your enthusiasm. I have my sights set on being a sponsor as well and I think having funds for the initial set up has to be the easy part. The hard part is spending years of networking and meeting with investors to earn their trust so that when you do find that great deal (which BTW is also incredibly difficult in the current real estate cycle) they'll invest with you in short notice.
@Kyohei Yoshida get a “Best Ever Apartment Syndication Book” and start educating yourself about the ins and outs of this business, this is a foundation for your successful multifamily business.
My husband and I had some of the same questions you have when we first began investing in larger multifamily apartment complexes! We had previous experience owning single family rentals and a couple of smaller multifamily rentals in our home state of Oregon, but we wanted to find a mentor who could help us get to the next level and learn how to be part of syndications of larger 100+ unit apartment complexes. We were fortunate enough to find the perfect mentors for us, Mark and Tamiel Kenney of Think Multifamily in Dallas, TX. We live in Portland, OR, so we traveled to one of their events in Oct. 2017 and ended up joining their group. We were able to invest in 3 deals passively at first, and then started helping out on the GP side of syndications and have been involved in another 6 deals on the GP side since then!! It really makes a difference when you have a mentor and a network of like-minded people who you can learn with and do business with. We had some initial capital to invest in deals, but you don’t necessarily need money to be part of the GP side of a syndication. You also don’t have to be an accredited investor. The key is to find your strengths (maybe it's finding deals, networking with investors and raising capital, helping by signing on the loan for net worth or liquidity, putting up earnest money for the deal, etc.). What we have found is apartment syndication is definitely a team sport made up of several individuals with different skill sets that we can all bring to the table! We have found it to be so beneficial to go to regular events to network with other apartment investors and syndicators.
If I can answer any questions for you, or if it would be helpful to get on a call with me and my husband, @Josh Houser, we would love to tell you about our experience and possibly answer any questions you might have as you start your journey with apartment syndication. So thankful that we decided to go bigger faster by getting involved in 100+ unit apartment investments.
You dont have to have any money (except to advance certain costs, like legal, due diligence, etc) but it helps to have skin in the game if you're just starting out.