Typical Syndication Minimum Buy In

11 Replies

Syndication is huge right now for various reasons. I want to invest on the passive side of real estate. Is there a average minimum to buy in usually for a deal or does it vary deal to deal? Thank you for any feedback. 

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Originally posted by @Nathan Payonk:

Syndication is huge right now for various reasons. I want to invest on the passive side of real estate. Is there a average minimum to buy in usually for a deal or does it vary deal to deal? Thank you for any feedback. 

$70k to $100k as always do your homework on any deal. 

Originally posted by @Nathan Payonk :

Syndication is huge right now for various reasons. I want to invest on the passive side of real estate. Is there a average minimum to buy in usually for a deal or does it vary deal to deal? Thank you for any feedback. 

 Yes there is huge variation, and a lot of it depends on the legal structure the organizer is using.

For example if they are using regulation A+ (which allows them to target nonaccredited investors) the minimums are usually quite low: sometimes as low as $100 (but more typically around $5000-$10,000).

If they are using 3c1 and 506b or 506c to target accredited investors only, they are generally limited to 99/100 investors, so the minimums are higher (typically around $25,000 but can be higher end as much as $500,000 or more).

Other structure completely differently and target only qualified purchasers only ($5 million+ in investments not counting primary residence). These structures often can allow up to 1999/2000 investors so the minimums can theoretically be much lower than accredited and occasionally are. Although, since they are targeting people with deeper pockets, it's actually not uncommon to see minimums at $1 million-$5 million in this range.

In my world, on Reg D 506(b) & (c) syndications, most minimums have been $50k, but I have seen a $40k on a smaller deal and a few $75ks & $100ks for larger deals.  It is way to keep the LP count manageable.

My $0.02 is get into several deals ratter than one, if that is feasible.

Charles LeMaire

@Nathan Payonk As you can see the minimums vary significantly, even though it runs for at least half of them at a minimum of $50k. What's more important is to come in as an accredited investor as it opens up many more opportunities. 

@Nathan Payonk rather than echo what everyone else has said above (great input, by the way), I'll add something else to the convo. Most syndications require investors to be accredited; $200K+ income for the past 2 years and expectation to make the same in the current year, $300K+ with a spouse, or $1M in assets, excluding primary residence. If you don't meet accredited qualifications, you can always consider crowdfunding sites to get involved in commercial real estate passively.

Thanks to everyone for the valuable information. So if any of you can give advice to your 22 year old self that wanted to invest passively  or work towards that what would you say? Is it stocks, bonds? crowdfunding? or simply start saving cold cash until I hit a dollar amount figure. Thanks for any input, it is very helpful.

At 22 my best advice would be to focus on maximizing future income. Until you have at least 100k saved up investments don't really matter that much vs your income.

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