Syndication - where to place my money?

Question

Hello BP,

I am looking into investing with syndication agencies that raise money to buy multi family, mobile home and self storage facilities. I am aware of nighthawk Equity, Think Multi Family and Wellings Capitol. Who else is out there? I am looking for 15-20% returns and a quick turn around. I have seen some funds go as long as 9-10 years and that is too long. I am thinking more along the lines of 2-5 years. Who do you recommend and if you had any experience you can share that would be great as well. Thanks.

Nick B. · Answer

There are plenty of syndicators here on BP. Just search for them. However, many are 506b which means you have to have pre-existing relationships with them.

15-20% and quick turnaround are not very likely in today's market. If someone underwrites to 20% IRR for investors (net of fees) I'd be very suspicious of their projections.

Lee Ripma · Answer

@Reinhard Kurzen

As others mentioned most syndications are 506b so you have to network to find them. I don’t think what your looking for is too high, I think you’ll be able to find it. Just make sure the numbers are conservative. It’s easy to show a high return on paper but you want to make sure that what is feeding into that makes sense and is achievable.

Ben Steelman · Answer

Kansas City is where I park my investments. Let me know if you'd like to connect and discuss the KC Market!

Ian Ippolito · Answer

Hi Reinhardt, I generate all of the income I live off of via passive investments like syndications/crowdfunding.

If you are an aggressive investor (and from your target returns it sounds like you are) then you can literally find hundreds of deals each month. You could start looking on a website like CrowdStreet, Arbor Crowd or Real Crowd.

On the other hand if you are a conservative investor like me, you may find only four or five good sponsors in an entire year. I like one particular multi family sponsor who has full real estate cycle experience, uses conservative leverage and high skin in the game. They market under 506B and are not allowed to publicly solicit. So if you are interested then  message me privately and I can give you more info.

Alina Trigub · Answer

@Reinhard Kurzen

I agree with the feedback you've received here about the terms being at least 5 years or longer especially with the IRR expectations that you have. Syndications are geared more towards long term. While some do sell the properties sooner than anticipated, it's not feasible to offer such high IRR within a shorter period of time.

Continue networking online and offline, also read up through some of the old posts to find the right people. Also, here're a couple of posts that you may find helpful in researching MHP and operators: https://www.biggerpockets.com/member-blogs/10850/88862-pros-and-cons-of-investing-in-mobile-home-parkshttps://www.biggerpockets.com/member-blogs/10850/76728-questions-to-ask-a-syndicator

Todd Powell · Answer

@Reinhard Kurzen. I sent you a PM! Solid returns, lower risk and appreciation is what true Passive RE is all about.

Zaid Bender · Answer

@Reinhard Kurzen buying a Multifamily in a job growing cities and states. Syndication has to be done with a successful syndicator with a proven track record. If you have more questions, we are more than happy to explain to you anything you want. We are investing in North Carolina.

Best wishes,

Dr. Bender

Carlos Ptriawan · Answer

Some MHP Operators: Gelt,Saratoga,Elevation. That's what I remember on top of my head.For DD, It's better to work together with the old-time investor that already invested with them, rather than asking them a bunch of questions. Realistically at the end of the bull market cycle like today, I will expect min 6 years investment and that's if we're lucky. Start asking if their appraisal value is better than their proforma. Work with the one that delivers conservative number, but deliver more in return.

Michael Heisterkamp · Answer

2-5 years is a short timeline for a syndication.  A timeline of 4-7 with an average of 5.5 is typical.  To get the return profile you are looking for will require value add projects which can take around 2 years just to perform, add another year for stablization and then another year to prove out that stabiliztion and you are already at 4 years.  IRRs generally tend to exit their highest growth pattern around year 5 for value add plays and this is generally when operators will begin the exit process.

This doesn't even begin to touch the legal requirements for 506(b) or (c) regulations.  You will comforatably have to network with an operator for about 6 months before they will take capital from you.  It is technically 3 touches but most don't pay attention to that becuase it can raise questions and it is harder to justify the we are existing friends line many people will feed to the SEC.

Carlos Ptriawan · Answer

Join some private investors club, they have the list and have DD most of the syndicators (and most DD are not pretty). I can say roughly your expectation is too high :)

Syndication - where to place my money?

Most Popular Reply