Multi Family Syndication

[William Merone]

We are underwriting a few 4-5 unit multi-family deals.  We are having trouble finding the most efficient structure for refinancing the limited partners out of the deal.  What are some creative ways of refinancing a syndication to get the investor a decent return but not giving away too much?

[Charlotte Dunford]

You cannot refinance your LP's out of a syndication. That's not how it works. Your LP's took risks, believed in you when the asset was not in good shape. They were in the deal, come higher or hell water. Now that the asset is in good shape and is making money, they are absolutely entitled to participate in the upside of the deal. (The operating agreement should have addressed this) That's what syndication is about. 

I think what you have in mind is more of a private loan, instead of a syndication. For a private loan, you can certainly pay your investors back through a refinance but not in a syndication.