How did you get started syndicating real estate deals?

Question

I'm a self-invested landlord w/ 10 units who wants to syndicate larger multifamily and commercial.

What are the recommended steps I should take to my first syndication deal?

Is it worth it to take mentorship/coaching courses like Dave Lindahl's RE Mentor or Michael Blank's course? Or should I just read books to begin with? If so, do you have any recommendations?

Thanks yall.

Gino Barbaro · Answer

Account Closed

Hi Kenny,

I actually started podcasting all the experts in syndication and read Sam Freshman's book on syndication. We recorded a podcast with Sam, and his syndication model is very interesting.

I would then begin to create a team, and select an experienced syndication attorney to guide you. We use @Kim Lisa Taylor.

I would start out by reading books, listening to podcasts, and if you are still considering syndication, then I would seek out a mentor. You will have at least a good base of knowledge to be able to ask the right questions and you will be able to leverage someone who has syndicated before

Good luck

Gino

Hadar Orkibi · Answer

The Wheelbarrow Profits book, Academy and Podcasts are highly recommended. great guys and great value!!

@Gino Barbaro and @Jake Stenziano know their stuff.

AJ Shepard · Answer

@Kenny Vilayvong

I also forgot to say that we are always an investor in our projects.  When we started out we picked a project that we could cover ourselves, if no investors wanted it we could take it down.  Just made us feel good about financing and sleep at night.  We are a little more comfortable now and able to hopefully make bigger jumps soon.

AJ Shepard · Answer

@Kenny Vilayvong

Much like you my brother and I started buying houses, then got into buying duplex’s and four plexes.  We kind of had an epiphany that when we started buying larger deals that the financing became way easier and a lot more favorable.  With your track record, you may qualify.

We’ve always used investors in some capacity and have been able to keep 95% of the units we purchased.  We’ve performed 1031s and started other businesses (brokerage, property management, construction).  The latest business has been syndications which we believe will allow us to scale a lot quicker as far as unit count.

We may not be the people to talk to if you want to quit your day job tomorrow to get into the business, but if you’re looking for a strong operator that knows the market we operate in really well, we’d be those people.

We performed our first syndication at the beginning of the year.  Purchase for 1.27m and the appraisal after our 85k value add came to be 1.8m.  We’re starting small and growing from there.

On how we did it, we set a reasonable goal, one syndication in 2019 and then scale from there.  Our goal this year is 50 units.  Keep educating yourself, podcasts, books and finding people on here to talk to.

Happy to answer any other questions you may have!

Mack Benson · Answer

I'm in favor of both approaches. You can learn a lot by self educating through books but I firmly believe most successful syndicators employ a mentor or coach in some way. Some books even list a mentor as one of the most important team members you have. They will know the markets, have vendors and be able to help you through the process. Additionally, think of professional sports players, I don't know of any who have gotten to where they are without the help of top coaches and mentors.

There are a number of short books that you can read through before making a decision to seek out a mentorship program. I would suggest checking out "Wheelbarrow Profits" by Jake Stenziano and Gino Barbaro and "Syndicating is a B*tch" by Bruce Peterson. Both are short reads and give you an overview of what to expect during a deal.

Brian Adams · Answer

Account Closed I have probably spent 100k+ on real estate training, seminars, etc. and also read books.

My suggestion, and to get to your goal the fastest, locate a good mentor or a coach.

There is no easy button in this business, so find a coach that will push you to excel.

Good luck with your exciting journey!!

Charles Seaman · Answer

Account Closed already mentioned, both books and mentors are great resources for you to use while learning about syndication.  The resources that you use will largely depend on your budget and your level of commitment.  Books and the BiggerPockets forums (and articles) are great free and low cost resources to use.

As a disclosure, I did take courses with RE Mentor and found them to be very valuable, but they're also very expensive.  I didn't buy coaching/mentorship with them, but I really didn't need it either because I was fortunate enough to work full-time for a commercial real estate investor before getting involved with multifamily syndication.

Another resource that you can use right now is attending virtual Meetup events that will allow you to connect with people all over the country that are active in the space.  You might find that offering to work for free for one of them in exchange for training could be a valuable resource for you because you can learn through doing and also get the benefit of being involved with somebody else that's more advanced than you are.

Account Closed · Answer

@Gino Barbaro

Thanks Gino! I’ll take the advice that you’ve passed on.

As far as teams go, could you share with me who you are recruiting in the beginning?

Account Closed · Answer

@AJ Shepard

Glad to hear of your success AJ! This is exciting to read.

A few more questions if you didn’t mind;

1. What pieces of education were the best in your journey leading up to your first large deal?

2. How much money do you pocket on a upfront basis and reoccuring basis on a deal?

- I’ve always wondered how much the structure of the deal effects profits and what a real example of how much a deal actually makes an investor would look like.

AJ Shepard · Answer

@Kenny Vilayvong

We really relied on reading.  We both like joe fairless book and podcast.  The michael blank podcast has been good as well.  We read the hands off investor as well.  Through all this you can get a really good idea on how to do it.  We’ve also previously partnered with quite a few people to make deals work.

My brother and I really try to push ourselves and it’s all about breaking it down into pieces that you can accomplish in a day and in a week, identify that next step forward and how to make that step in the quickest way possible.

As far as up front returns, we have been buy and hold company for a long time.  We’re not worried about getting fees up front, we are looking for long term appreciation and good profits.  Because we are brokers as well we are able to negotiate some sort of split out of escrow with the selling broker.  Our main goal is to get into the business quickly and augment our existing portfolio and make investors a boatload of money in the process.

Hope this helps, and feel free to ask more questions!

How did you get started syndicating real estate deals?

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