Real Estate Syndications: Who's Taken the Leap and How Did It Pay Off?

[Nathan Gesner]

Buying a house is straightforward; managing it can be a whole different challenge. The same principle applies to real estate syndications. Over the past few years, many groups have raised funds and acquired properties, promising investors impressive passive returns.

But here’s the real question: how have these syndications actually performed? Have they delivered on their promises, or have the results been underwhelming?

If you’ve invested in a syndication, I’d love to hear your experiences. Did it meet your expectations, fall short, or exceed them? Let’s discuss!

[Greg Scott]

I have invested in over 50 syndications, of which about 45 are still active.  I have also done four syndications myself.  Of course, on the syndications we put together, we get some compensation for our efforts, so I'll ignore those when discussing my returns below.

Of the 11 deals we've had that have gone full cycle, we are averaging about a 40% annualized rate of return.  Of those 11, only one had net loss, and clearly the others did very well with outsized returns.

Of the 45 that are still active, the returns have been a little softer the past two years, and we had two small capital calls.  On the other hand, we also had three provide cash-out refinances.  My quarterly cash distributions hit bottom about a year ago and have been on the rise since then.  About 1/3 are still not providing distributions but their cash position is strong and I'm not concerned about them potentially selling at a loss.  Six of them just launched this year, so I wasn't expecting distributions anyways.

These syndications have change life.  I am truly blessed.

However, you should know that these syndications are not available to everyone.  I am a member of a private group that puts these syndications together ONLY with members of the group.  They have rules and best practices about how we put these deals together which has collectively saved us from much of the pain being experienced right now in the multifamily space.