How did you transition into becoming an Active Syndicator?

25 Replies

As with anything else, its scary to get into leading a syndication as a Sponsor, 

1. How is your experience so far?

2. What was your trigger/motivation?

Looking forward to hearing your story!!

1. Loving it. Closing on a deal next Friday 9/10/21. Assuming we close without incident, investors will get an 80% ROI over two years. 80% is not a typo.

2. Seems like this is a great way to leverage investor money (there is a lot of it right now) into creating wealth.

Investors want an exit strategy. This makes multifamily similar to a flip in the residential arena. It's longer term. I planned to have a sale in 5 years, but happened to find a great buyer. 

We’ve been in the real estate business for a while.  But recently into syndications with in the last 2 years.  I can say that the syndication has allowed for us to do more deals every year, and larger deals.  We’ve taken all the lessons that you learn from flipping, managing, financing and roll them into one big deal.  Ya, we don’t get 100% of the deal as in the past, but we get the opportunity work on larger deals.  There is definitely an economy of scale that exists as well.  From sfh to small multi family to 20+ units, the larger you go the more stable your costs and returns are.  

It certainly takes some time to get the experience, but once you do, utilizing the leverage from the bank and from other people allows for great returns.  Both for you as the sponsor and for the investors.

Originally posted by @Benjamin Aaker :

1. Loving it. Closing on a deal next Friday 9/10/21. Assuming we close without incident, investors will get an 80% ROI over two years. 80% is not a typo.

80% roi over 5 years (as per original plan) equates to 12.5% annual return, which is quite standard. Also, the stock market has yielded 80% return since the start of the lockdown last year, with zero effort. And that’s average, I’m not even cherry picking any stock.

If I have to put effort then I would want more than what can be had with zero effort. I will switch to investing in syndications when the stock market becomes overpriced and offers lower profit.

Originally posted by @Suresh Kannan :

As with anything else, its scary to get into leading a syndication as a Sponsor, 

1. How is your experience so far?

2. What was your trigger/motivation?

Looking forward to hearing your story!!

Congrats on looking into syndications! This is a business that will require tons of time commitment, education, dedication, and persistence. I got start by hiring mentors, reading books, listening to podcasts, and networking.

I started investing in single family homes and fix-and-flips while in business school. I have a few deals going on now and will soon by a general partner in 417 multifamily units and another 23 as a JV partner.

I found my passion for apartments after realizing you don't always have to work the typical 9-5 job, take your 2 weeks vacation, invest in a 401K, and maybe have a good life after I retire. Haha! Apartment investing allows me to live a life by design NOW vs waiting until I retire. It's hard to scale with single family houses and I didn't want to deal with the tenants and repair costs. I am generating passive income so I can control my time. Much better than spending my life working a W2 if you ask me. 

@Tushar P. Thanks for your comment. I'll reiterate that 80% ROI is indeed fantastic. When you claimed that the return would be a pedestrian 12.5%, you made the assumption that the sale would be the same price at year five. In that amount of time, I'd have the benefit of three more years of appreciation as well as debt pay down. You won't have that with your shares in the stock market.

The Dow Jones Industrial Average has climbed from 27,993 on Sep 14, 2020 to 34,819 currently as of this post. This is a 24% increase. Investing $27,993 across all Dow Jones stocks would have yielded a 24% ROI if you cashed out today, a far cry from 80%. Perhaps your personal investments have yielded 80%, and if so, I commend you for your foresight. On the other hand, if you'd like to learn more about real estate investing, check out my blog, or PM me.

Originally posted by @Benjamin Aaker :

1. Loving it. Closing on a deal next Friday 9/10/21. Assuming we close without incident, investors will get an 80% ROI over two years. 80% is not a typo.

2. Seems like this is a great way to leverage investor money (there is a lot of it right now) into creating wealth.

Investors want an exit strategy. This makes multifamily similar to a flip in the residential arena. It's longer term. I planned to have a sale in 5 years, but happened to find a great buyer. 

Hi Benjamin,

Congrats on your latest deal! Out of curiosity, what have you found to be the greater challenge?  1) Finding good deals or 2) Building up your investor base so that when you find that deal, you and your loyal LP's can act relatively quickly? I've always been curious about how syndicators are able to build up their network to be aware of deals that come up... and at the same time, build up their network of LP investors that trust in you enough to invest when you find a good deal.

Hi @Tony Kim ,

When I was starting out, building the investor list was the hardest. I didn't have a track record and finding people willing to invest was difficult. My first syndication I was careful to keep enough cash that I could fund the entire deal if I had to. I know this isn't possible for everyone, though. This way, I had less fear that I would lose the deal if I couldn't get people to invest. I'd recommend doing this for those people just starting out. 

Now that I have a track record, I have enough investors that I have to turn some away each time. At this point, deal-finding is the most difficult. 

Originally posted by @Benjamin Aaker :

1. Loving it. Closing on a deal next Friday 9/10/21. Assuming we close without incident, investors will get an 80% ROI over two years. 80% is not a typo.

2. Seems like this is a great way to leverage investor money (there is a lot of it right now) into creating wealth.

Investors want an exit strategy. This makes multifamily similar to a flip in the residential arena. It's longer term. I planned to have a sale in 5 years, but happened to find a great buyer. 

Congratulations @Benjamin Aaker. Totally and thanks for sharing!!

Originally posted by @Justin G. in G.:
Originally posted by @Suresh Kannan:

As with anything else, its scary to get into leading a syndication as a Sponsor, 

1. How is your experience so far?

2. What was your trigger/motivation?

Looking forward to hearing your story!!

Congrats on looking into syndications! This is a business that will require tons of time commitment, education, dedication, and persistence. I got start by hiring mentors, reading books, listening to podcasts, and networking.

I started investing in single family homes and fix-and-flips while in business school. I have a few deals going on now and will soon by a general partner in 417 multifamily units and another 23 as a JV partner.

I found my passion for apartments after realizing you don't always have to work the typical 9-5 job, take your 2 weeks vacation, invest in a 401K, and maybe have a good life after I retire. Haha! Apartment investing allows me to live a life by design NOW vs waiting until I retire. It's hard to scale with single family houses and I didn't want to deal with the tenants and repair costs. I am generating passive income so I can control my time. Much better than spending my life working a W2 if you ask me. 

 Thanks @Justin G., that's a great Journey. Escaping the 9-5 is my driver to0:-), Will follow the footsteps of people like you. Congratulations and happy for your accomplishments Justin!!

Originally posted by @Suresh Kannan :
Originally posted by @Justin G.in G.:
Originally posted by @Suresh Kannan:

As with anything else, its scary to get into leading a syndication as a Sponsor, 

1. How is your experience so far?

2. What was your trigger/motivation?

Looking forward to hearing your story!!

Congrats on looking into syndications! This is a business that will require tons of time commitment, education, dedication, and persistence. I got start by hiring mentors, reading books, listening to podcasts, and networking.

I started investing in single family homes and fix-and-flips while in business school. I have a few deals going on now and will soon by a general partner in 417 multifamily units and another 23 as a JV partner.

I found my passion for apartments after realizing you don't always have to work the typical 9-5 job, take your 2 weeks vacation, invest in a 401K, and maybe have a good life after I retire. Haha! Apartment investing allows me to live a life by design NOW vs waiting until I retire. It's hard to scale with single family houses and I didn't want to deal with the tenants and repair costs. I am generating passive income so I can control my time. Much better than spending my life working a W2 if you ask me. 

 Thanks @Justin G., that's a great Journey. Escaping the 9-5 is my driver to0:-), Will follow the footsteps of people like you. Congratulations and happy for your accomplishments Justin!!

 Oh thanks! I'm just getting started and have a long way to go as well. 

Originally posted by @Benjamin Aaker :

@Tushar P. Thanks for your comment. I'll reiterate that 80% ROI is indeed fantastic. When you claimed that the return would be a pedestrian 12.5%, you made the assumption that the sale would be the same price at year five. In that amount of time, I'd have the benefit of three more years of appreciation as well as debt pay down. You won't have that with your shares in the stock market.

The Dow Jones Industrial Average has climbed from 27,993 on Sep 14, 2020 to 34,819 currently as of this post. This is a 24% increase. Investing $27,993 across all Dow Jones stocks would have yielded a 24% ROI if you cashed out today, a far cry from 80%. Perhaps your personal investments have yielded 80%, and if so, I commend you for your foresight. On the other hand, if you'd like to learn more about real estate investing, check out my blog, or PM me.

 Lockdown started in March last year, not September. And no foresight was needed to get ~80% return with zero effort in less than 2 years - the stock market had a massive drop, pandemic is obviously temporary, and the govt was debating about how many trillions they should print. It was a no brainer. And ~80% is average. The return is 10x higher if a stock was cherry picked like the syndication.

Anyways, both real estate and stocks are passive investments for me - based on the market cycle, I can choose whether to invest in both, one, or none. By the way, I don’t see anything wrong with 12.5% return, and congrats on getting 80% return.

@Suresh Kannan My father and I have a financial market background - he's a professional trader (Forex & Futures) and managed a small hedge fund for years - I was on the financial education side of the business.  We noticed many shifts in the markets that made it more challenging to achieve the returns our investors were accustomed to, so we decided to pursue hard assets and realized Multifamily would be the most recession-resistant. In our first year, we closed 173 units (then Covid hit, so it slowed down our acquisitions), 2nd year, we closed 236 units, and now we're using the same syndication model to invest in Texas Vineyards - while still pursuing more MF deals. If you're looking to pursue the Active side of MF, I'm happy to chat on a call and share the good/bad and the ugly :) 

@Keeley Hubbard that is very Insightful and thanks for sharing that. I'm analyzing smaller multi family units and also as a team looking into syndicating it. Definitely, your advice would be valuable and looking forward to get your take on this journey!!

Originally posted by @Suresh Kannan :

 Thanks @Justin G. , that's a great Journey. Escaping the 9-5 is my driver to0:-), Will follow the footsteps of people like you. Congratulations and happy for your accomplishments Justin!!

 While I appreciate the desire to "escape" the 9-5, I hope you realize you will be going to the 8am-11pm routine when you start syndicating ;-) Dealing with other people's money comes with more responsibility and generally more hours.

Yes, I know its not a "job" if you love doing it and that is true but starting syndications is like a start-up and takes resources, time, effort and cash upfront to make it successful.

Just my $0.02

@Suresh Kannan I am just getting into syndication myself! I joined a MF mentorship program in August and I am currently working on the education and team-building/networking I need to have in place for a first MF deal. I have been investing in RE for the last 5 years; mostly SFRs and flips. I was looking for a way to go bigger and realized MF syndication will give me economy of scale to reach my cash-flow number much more quickly than sticking with smaller deals. I am VERY excited and motivated to learn all that I can and pretty much always love to chat REI!

@Suresh Kannan , it is very rewarding help people achieve their financial goals and be a useful tool for individuals wanting to learn more about real estate. The biggest takeaway from what I learned is that people are investing in you more than the actual deal. Having that trust and relationship is crucial. Good luck

Originally posted by @Percy N. :
Originally posted by @Suresh Kannan:

 Thanks @Justin G., that's a great Journey. Escaping the 9-5 is my driver to0:-), Will follow the footsteps of people like you. Congratulations and happy for your accomplishments Justin!!

 While I appreciate the desire to "escape" the 9-5, I hope you realize you will be going to the 8am-11pm routine when you start syndicating ;-) Dealing with other people's money comes with more responsibility and generally more hours.

Yes, I know its not a "job" if you love doing it and that is true but starting syndications is like a start-up and takes resources, time, effort and cash upfront to make it successful.

Just my $0.02

 Totally agree! That's exactly what I'm doing now. I would much rather work 70 hours a week doing something I am passionate about instead of working 40 hours a week for somebody else.

Originally posted by @Hassan Ali :

Where do I begin with Syndication and education on the process as well as laws in this field of REI?

Currently in the Houston area to preface this.

What books have you read about syndications so far?

Originally posted by @Jacqueline Coombs :

@Suresh Kannan I am just getting into syndication myself! I joined a MF mentorship program in August and I am currently working on the education and team-building/networking I need to have in place for a first MF deal. I have been investing in RE for the last 5 years; mostly SFRs and flips. I was looking for a way to go bigger and realized MF syndication will give me economy of scale to reach my cash-flow number much more quickly than sticking with smaller deals. I am VERY excited and motivated to learn all that I can and pretty much always love to chat REI!

 Congrats for working towards your goals! Good luck with the program!

@Percy N. appreciate the honest opinion and I agree, and I am used to the grind having several businesses in the past Grocery store, Software company with 20+ employees in a physical location etc., taught me that:-) and I love to have that again only in the real estate Industry.


Originally posted by @Jacqueline Coombs :

@Suresh Kannan I am just getting into syndication myself! I joined a MF mentorship program in August and I am currently working on the education and team-building/networking I need to have in place for a first MF deal. I have been investing in RE for the last 5 years; mostly SFRs and flips. I was looking for a way to go bigger and realized MF syndication will give me economy of scale to reach my cash-flow number much more quickly than sticking with smaller deals. I am VERY excited and motivated to learn all that I can and pretty much always love to chat REI

Thanks for sharing that, and yes having the right team InPlace is key. Love to hear more about your journey!!

I started by building my own personal portfolio with my wife. Eventually, we realized there had to be a more efficient way and I spoke to a few folks who were working with investors or OPM (other people's money). I hired a mentor and joined in on my first deal as a GP before leading a JV deal and then leading syndications. We have now invested in close to $100 million worth of apartments.

This was all over the course of 7-8 years as I spent the first 5 years on our own portfolio before working with others.  The trigger was the dejection I felt after investing over $100k to buy an 8 unit in Chicago. I was less than enthusiastic about having to save that much again to be able to invest when my goal was to insulate myself from my day job. Felt like I was hustling backwards and needed to reassess what I was doing. Those conversations with others working with investors was pivotal.   

Originally posted by @Justin G. :
Originally posted by @Hassan Ali:

Where do I begin with Syndication and education on the process as well as laws in this field of REI?

Currently in the Houston area to preface this.

What books have you read about syndications so far?

Unfortunately, I haven't read an anything in this particular category yet. Do you have any suggestions?