Syndication or General Partnering?

[Adanna Davis]

While I look at large multifamily to invest, I wonder if it is worth starting a fund and syndicate the property with passive investors or find partners who will invest in the property but will be very active in the process. Have you done both and which is less of a headache? 

P.S. I love having control over the business aspect of my rentals!

Adanna

[Michael Ealy]

Originally posted by @Adanna Davis:

While I look at large multifamily to invest, I wonder if it is worth starting a fund and syndicate the property with passive investors or find partners who will invest in the property but will be very active in the process. Have you done both and which is less of a headache? 

P.S. I love having control over the business aspect of my rentals!

Adanna

 Adanna,

Either way, if you structure it right, you will have control. If I were you in your shoes, I will go the JV route first. Here's why:

1. It sounds like you have no experience with MF yet. If so, you have no right to risk other people's money yet. It's better to lose your money on your first deal than risk other people's money. In a syndication, the private investors are not in control - you are. If the one steering the ship has no experience - that's not good for you and for them. Some single family home investors think that simply because they're successful with flipping houses or renting a few houses that MF investing should be easy. Not necessarily.

2. With the right JV partners whom you vet, like and trust, they can bring more than money to the deal. They can bring their expertise, their credit, their experience, and their network. All these will help make your first MF deal successful vs. you doing it on your own.