Looking to invest through Real Estate Syndication

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Looking to invest through Real Estate Syndication

Brunnhilde Wijnaar
Atlanta, GA · Member since 2019 · 18 posts · 9 votes

Good afternoon all,

A newby investor here and I am researching investing through a Real Estate Syndication. Thought this would be a good start to dip my toes into the investor world. Any recommendations on existing Syndications with a good reputation? 

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Ian IppolitoBusiness Member
Investor · Tampa, FL · Member since 2015 · 1k+ posts · 1k+ votes
7y

I know some will disagree, but in my opinion: if you want to learn about something you should *not* get your education from someone who is trying to sell that product to you (which is also why I take a grain of salt with the education from many "gurus").

Personally I think the very best book for both newbies and experienced investors was written under a fake pen name by a man who has sat on both sides of the table for more than $1.7 billion worth of real estate transactions. His real name is Paul Kaseburg and his book covers everything a newbie needs to understand: from asset selection, to evaluating sponsors, to capital structures. For pros, he challenges conventional wisdom and explodes sacred cows by exposing hidden conflicts of interests and mis-alignments that many in the industry won’t admit to.

"Investing in Real Estate Private Equity: An Insider’s Guide to Real Estate Partnerships, Funds, Joint Ventures & Crowdfunding"
https://www.amazon.com/Investing-Real-Estate-Priva...

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  • Ian IppolitoBusiness Member
    Investor · Tampa, FL · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    @Brunnhilde Wijnaar, I have a significant amount of my portfolio in syndications and am happy to share with you the relevant ones that have done well for me. But it may or may not be useful, depending on how similar or different your risk tolerance is. I am a conservative investor, so someone who is aggressive will have a completely different opinion on things. Where do you fall on the spectrum?

    Also, I would not actually recommend starting with picking syndication sponsors, because you can end up with an unbalanced portfolio and accidentally take on more risk than you want or are expecting. If you haven’t done so already, I would recommend taking a step back and determining first how much of your investment portfolio do you want to put in real estate. Then figure out what you want to allocate to the different strategies (core, core plus, value added, opportunistic), capital stack types (equity, debt), asset type (Multi family, retail, office, self storage, hotel, etc). Then look for the top 2 to 3 sponsors in that area to investigate further.

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  • Oleg Shalumov
    Rental Property Investor · Teaneck, NJ · Member since 2016 · 567 posts · 291 votes
    7y

    @Brunnhilde Wijnaar  welcome to BP!

    I would recommend educating yourself on the subject of syndication before investing. There are plenty to sources here on Bigger Pockets, but feel free to let us know and we could provide you additional sources. 

    0Reply
  • Joe PrillamanPro Member
    Rental Property Investor · Carolina Beach, NC · Member since 2017 · 441 posts · 462 votes
    7y

    @Brunnhilde Wijnaar I would suggest reading Best Ever Apartment Syndication Book by Joe Fairless. I have never done a syndication but I have learned some great tips for my BRRRR investing.

    1Reply
  • George Blower
    Retirement Accounts Attorney · Southfield, MI · Member since 2017 · 3k+ posts · 1k+ votes
    7y

    @Brunnhilde Wijnaar

    Welcome to BP! My company offers products which allow our customers to use their retirement funds to invest in alternative investments including real estate.

    0Reply
  • Erik K.
    Realtor · McLean, VA · Member since 2009 · 184 posts · 80 votes
    7y

    You should start on educating yourself on all aspects of syndication so you can tell the difference between a good syndicator and a not so good one.  As @Joe Prillaman mentioned, The Best Ever Apartment Syndication Book is the best place to start along with SyndicationSchool.com.  There's a lot of great content on there.  I've learned quite a bit from listening to podcasts and attending webinars from these resources:

    0Reply
  • Alina Trigub
    Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
    7y

    @Brunnhilde Wijnaar

    Welcome to BP community!

    As several people have suggested you should start with the educational piece. Despite the fact you'd be passive investor in a syndication, you still need to understand what you're doing. Also, it is essential to determine what asset class(es) you'd like to invest in and educate yourself on that as well. 

    You can start with both of David Lindahl books. 

    I'm also sharing a few articles to get you started:

    https://www.biggerpockets.com/blogs/10850/73201-no...

    https://www.biggerpockets.com/blogs/10850/74883-wh...

    https://www.biggerpockets.com/blogs/10850/74895-fi...

    https://www.biggerpockets.com/blogs/10850/79257-de...

    Also, I have a whole library of books recommendations. Feel free to PM for more.

    Best!

    2Reply
  • Ian IppolitoBusiness Member
    Investor · Tampa, FL · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    I know some will disagree, but in my opinion: if you want to learn about something you should *not* get your education from someone who is trying to sell that product to you (which is also why I take a grain of salt with the education from many "gurus").

    Personally I think the very best book for both newbies and experienced investors was written under a fake pen name by a man who has sat on both sides of the table for more than $1.7 billion worth of real estate transactions. His real name is Paul Kaseburg and his book covers everything a newbie needs to understand: from asset selection, to evaluating sponsors, to capital structures. For pros, he challenges conventional wisdom and explodes sacred cows by exposing hidden conflicts of interests and mis-alignments that many in the industry won’t admit to.

    "Investing in Real Estate Private Equity: An Insider’s Guide to Real Estate Partnerships, Funds, Joint Ventures & Crowdfunding"
    https://www.amazon.com/Investing-Real-Estate-Priva...

    The Real Estate Crowdfunding Review
    View Page
    4Reply
  • Jabari Long
    Real Estate Broker · Detroit, MI · Member since 2014 · 384 posts · 149 votes
    7y

    Attend your REIA's and set alerts for JV Deals here BP. The more deals you're offered and review, the better you'll get at selecting the right ones for you.

    0Reply
  • Todd Dexheimer
    Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
    7y

    Here are a few articles that I have written. The first one, may be the most valuable for you. My advice is to learn about the real estate niches you prefer to invest in and then begin to talk with sponsors about their investing strategies. When you feel ready to invest, I would suggest spreading your money out to several investments and with a few sponsors. For instance, if you plan on investing $500,000, I would invest $50k-$100k/investment with 3 different sponsors in different markets. This allows for solid diversification. 

    https://www.biggerpockets.com/blogs/10145/83067-li...

    https://www.biggerpockets.com/blogs/10145/73373-op...

    https://www.biggerpockets.com/blogs/10145/72118-sy...

    0Reply
  • John FortesPro Member
    Multi-Family Syndicator · Abington, MA · Member since 2017 · 603 posts · 347 votes
    7y

    Learn as much as you can about syndications and from there buckle down on the market and the returns you are seeking. Determine if you plan to be a sponsor yourself or looking to be passive. Figure out exactly your goals are first before moving in a direction. As soon as you figure that out, you will then find clarity in where and how to tackle it. 

    0Reply
  • Brunnhilde Wijnaar
    OP
    Atlanta, GA · Member since 2019 · 18 posts · 9 votes
    7y

    @Ian Ippolito Thanks for your note. I am finding that I fall on the conservative end of the spectrum as well and have since this first post had an opportunity to revaluate. I am a taking more time to focus on the education piece first although we might be forced into a buy & hold as our current rent, (lease is up in May) is being increased with $200 per month. Lost to consider and to learn.

    1Reply
  • Brunnhilde Wijnaar
    OP
    Atlanta, GA · Member since 2019 · 18 posts · 9 votes
    7y

    Thank you @Oleg Shalumov I think I have listened to all podcast on Syndication from bigger pockets. Any books you would recommend?

    0Reply
  • Brunnhilde Wijnaar
    OP
    Atlanta, GA · Member since 2019 · 18 posts · 9 votes
    7y

    @Joe Prillaman Thank you Joe! Adding to my reading list.

    0Reply
  • Ben Leybovich
    Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
    7y

    See, it's the whole juxtaposition of "newbie investor" and "invest in syndcations" that is a bit frightening. A private placement is not the most complex structure that can be, but it's certainly complex. Your job as an investor is to reverse engineer the opportunity in order to intelligently evaluate risk/reward.

    As a newbie investor, are you able to do this? If not, do you have advisors who can help? Otherwise, how do you know what you are investing in...?

    1Reply
  • Oleg Shalumov
    Rental Property Investor · Teaneck, NJ · Member since 2016 · 567 posts · 291 votes
    7y
    Originally posted by @Brunnhilde Wijnaar:

    Thank you @Oleg Shalumov I think I have listened to all podcast on Syndication from bigger pockets. Any books you would recommend?

     I would recommend: 

    - “Best Ever Apartment Syndication Book” by Joe Fearless & Theo Hicks

    - "Multi-Family Millions" by David Lindahl

    0Reply
  • Brunnhilde Wijnaar
    OP
    Atlanta, GA · Member since 2019 · 18 posts · 9 votes
    7y

    @Erik K.thank you for sharing the resources Erik! Are you familiar with Goodegg investing? If so I’d be curious to hear your thoughts.

    0Reply
  • Erik K.
    Realtor · McLean, VA · Member since 2009 · 184 posts · 80 votes
    7y

    @Brunnhilde Wijnaar, I know of Goodegg, they were at the Best Ever Conference I just attended in Denver.  I haven't worked with them as of yet.

    0Reply
  • Theo Hicks
    Rental Property Investor · Tampa, FL · Member since 2015 · 1k+ posts · 969 votes
    7y

    There are a lot of forums where people list out credible apartment syndicators. But you still want to know how to qualify a syndicator. Trust, but verify. There are also a lot of forums and blog posts with questions to ask a syndicator before investing in their deal.

    0Reply
  • Kalen Jordan
    Austin · Member since 2015 · 149 posts · 80 votes
    6y
    Originally posted by @Ian Ippolito:

    @Brunnhilde Wijnaar, I have a significant amount of my portfolio in syndications and am happy to share with you the relevant ones that have done well for me. But it may or may not be useful, depending on how similar or different your risk tolerance is. I am a conservative investor, so someone who is aggressive will have a completely different opinion on things. Where do you fall on the spectrum?

    Also, I would not actually recommend starting with picking syndication sponsors, because you can end up with an unbalanced portfolio and accidentally take on more risk than you want or are expecting. If you haven’t done so already, I would recommend taking a step back and determining first how much of your investment portfolio do you want to put in real estate. Then figure out what you want to allocate to the different strategies (core, core plus, value added, opportunistic), capital stack types (equity, debt), asset type (Multi family, retail, office, self storage, hotel, etc). Then look for the top 2 to 3 sponsors in that area to investigate further.

    I'm also considering doing my first investment into a syndication and would love to hear about your experience. 

    0Reply
  • Kalen Jordan
    Austin · Member since 2015 · 149 posts · 80 votes
    6y
    Originally posted by @Theo Hicks:

    There are a lot of forums where people list out credible apartment syndicators. But you still want to know how to qualify a syndicator. Trust, but verify. There are also a lot of forums and blog posts with questions to ask a syndicator before investing in their deal.

    Can you link to some of those references with good questions to ask? 

    0Reply
  • Brunnhilde Wijnaar
    OP
    Atlanta, GA · Member since 2019 · 18 posts · 9 votes
    6y

    @Kalen Jordan I ended up buying 2 single family homes on 1 lot. Now exploring sub 30K properties and also reading up on mobile home parks. Looking for investments that require less upfront capital at this point.

    1Reply
  • Roni E.Pro Member
    Specialist · Earth 2.0 · Member since 2019 · 598 posts · 271 votes
    6y

    Do your homework, understand the core concepts, and review a lot of deals. Underwrite things yourself, check out youtube videos, read books, and so forth. Also, understand who are dealing are they sponsor, capital raiser or where they fall.

    0Reply
  • Ian IppolitoBusiness Member
    Investor · Tampa, FL · Member since 2015 · 1k+ posts · 1k+ votes
    6y
    Originally posted by @Kalen Jordan:
    Originally posted by @Ian Ippolito:

    @Brunnhilde Wijnaar, I have a significant amount of my portfolio in syndications and am happy to share with you the relevant ones that have done well for me. But it may or may not be useful, depending on how similar or different your risk tolerance is. I am a conservative investor, so someone who is aggressive will have a completely different opinion on things. Where do you fall on the spectrum?

    Also, I would not actually recommend starting with picking syndication sponsors, because you can end up with an unbalanced portfolio and accidentally take on more risk than you want or are expecting. If you haven’t done so already, I would recommend taking a step back and determining first how much of your investment portfolio do you want to put in real estate. Then figure out what you want to allocate to the different strategies (core, core plus, value added, opportunistic), capital stack types (equity, debt), asset type (Multi family, retail, office, self storage, hotel, etc). Then look for the top 2 to 3 sponsors in that area to investigate further.

    I'm also considering doing my first investment into a syndication and would love to hear about your experience. 

     Well I could take up your next couple of years if I chose to talk about the entire subject. Is there a specific question or set of questions you have?

    The Real Estate Crowdfunding Review
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  • Kalen Jordan
    Austin · Member since 2015 · 149 posts · 80 votes
    6y
    Originally posted by @Ian Ippolito:
    Originally posted by @Kalen Jordan:
    Originally posted by @Ian Ippolito:

    @Brunnhilde Wijnaar, I have a significant amount of my portfolio in syndications and am happy to share with you the relevant ones that have done well for me. But it may or may not be useful, depending on how similar or different your risk tolerance is. I am a conservative investor, so someone who is aggressive will have a completely different opinion on things. Where do you fall on the spectrum?

    Also, I would not actually recommend starting with picking syndication sponsors, because you can end up with an unbalanced portfolio and accidentally take on more risk than you want or are expecting. If you haven’t done so already, I would recommend taking a step back and determining first how much of your investment portfolio do you want to put in real estate. Then figure out what you want to allocate to the different strategies (core, core plus, value added, opportunistic), capital stack types (equity, debt), asset type (Multi family, retail, office, self storage, hotel, etc). Then look for the top 2 to 3 sponsors in that area to investigate further.

    I'm also considering doing my first investment into a syndication and would love to hear about your experience. 

     Well I could take up your next couple of years if I chose to talk about the entire subject. Is there a specific question or set of questions you have?

    Haha! Would love to know as much as possible about the deals you've been involved in to date. I find that every time I learn about the details of another deal I learn a little more about what types of things to look for, what to look out for, what kinds of returns are possible, etc. I'm soaking it all up right now! Thanks! 

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