Syndication strategies the work or might not

[John Hamilton]

I’d love to hear some syndication strategies you guys use regularly. I am referring to pay out strategy/schedule, preferred returns, strategies to avoid, mistakes, refinance periods, uncommon splits, length of the hold or anything others may find valuable! 

I wish you all a prosperous real estate experience! 

[Kevin Dean]

@John Hamilton

One thing I've noticed that the very successful, large syndicators do is that they use leverage properly. 

Assuming you are able to (1) find great deals, (2) structure deals properly in a way which attracts the capital needed to close and (3) operate a property properly, it seems as though the main differentiator between those who are around for a long time and those who are not, is leverage. 

Knowing when to go to 80% LTV (loan to value) in order to maximize returns, and when to dial it back to 65% LTV for example, resulting in a lower overall projected return, is a skill that the well established sponsors are able to manage on a deal by deal basis.

The antithesis to this would be a sponsor with the philosophy of "We do an 80% LTV loan on every deal no matter the market or the business plan."