Syndicated Real Estate Investment

6 Replies

Does anyone have experience with Syndicated Real Estate investment? 

Friend of mine is inviting me to explore joining a potential major deal put together by their friends... 

Are this real? What is the return? What to look out for? What questions to ask the sponsor? How to evaluation? 

Any thought or advice would be greatly appreciated. 

Thanks. 

@Kathy Jin , imho, it's NOT for novices. If you've been approached by others, for the purpose of separating you from your funds, then THAT's a big red flag, right there! It's good that you asked here, BUT, I also suggest that you do NOT respond to subsequent ideas sent to you from BP members, who might be sniffing the smell of your money.

You're asking all the right questions, but, be cautious. Everyone who wants YOU to participate will only give THEIR slant on how good THEIR program is, vs any other. It could take YEARS of research before you come to a correct conclusion. Because even when they show you their fantastic historical returns, when you look at their fine print, it will/should ALWAYS have the disclaimer to the effect: "Past performance is no indicator of future results".

ie. Enter at OWN risk!

And in this economy, at this time, those risks could be greater than ever before. All the best...

Quick tip.  You obviously got into real estate to be an investor and to make your own money.  I would stick with that direction instead of handing your money off to someone whom you have no idea about or if their deals are legitimate.

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@Kathy Jin

Syndicated real estate investments are real, but as @Brent Coombs mentioned, you need to be cautious and invest wisely.  Here is a short list of pros/cons for you:

Cons / Risks

Preservation of your money is paramount.  If these are "friends of friends" that you do not know, do not invest.  You must know the team, ask about their past deals, ask to see all documentation, and have someone (ideally your attorney) who is familiar in these syndications review that documentation.

Ask to be placed on their mailing list and monitor the deals they do before you invest.

Do not invest if you are not absolutely sure of what you are investing in.

Pros - not all of these may apply to your particular syndication:

Quarterly Dividends – Investors receive consistent dividend checks

Portfolio Diversification – Ability to make right-sized investments in real estate, across geographies.  No need to invest “all-in” on one property.

Professional Management – All property expenses and maintenance are taken care of

Professional Team – In-place network of brokers, contractors, and vendors – no need to build a team.

No Tenants to Manage

Access to Better Deals

Ease of Entry – Investors become active by signing paperwork and sending in capital investment.

Tax Deduction – Pass-through structure enables full advantage of all real estate tax benefits

As always, invest wisely.

Thank you guys for all your great advice. I am suppose to meet with the guy who is putting together the deal later this week. I will hear what he has to say. 

Cheers.

@Brent Coombs Guess what? Someone from this site is indeed sniffing the smell of my money and wants me to join his syndicated deal promising 30-40% return. Ha! 

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