Syndication structure with land - Retail Shops

3 Replies

Hello everyone,

I have a question that is probably very basic but I couldn't find an answer in the forums. Can I include land that I own as part of a syndication deal? If so, how will it be structured? Here is the scenario:

I have a 1.7 acre commercial land/lot that I would like to develop and put retail shops but I don't have the money capital to do it.

Can I create a syndicate to raise money for this project? 

The land is located on a busy street with 41000 traffic count weekday and there is a lot of construction going on in the area.

I am sure I need to provide more detail so feel free to ask. Thanks!

Eddie Q.

Hi @Eddie Quispe ,

I wouldn't necessarily consider that question "basic"... it's a great question to ask.

I find that anything two [or more] people agree on can be figured out.  Here are some ideas that come to mind.  Whether your investors like these ideas will depend on what everybody feels is equitable.

• The project buys the land at market value from you personally.  This removes it from you, puts it into the project, and compensates you for the land.  This will likely have tax implications to work through.

• The project buys the land at a discount from you personally. This has the same effect of compensating you, but you need to make it evident to your investors that part of your contribution to the deal is the discounted price you accepted for your land.

• You contribute your land to the project as your equity into the project.  This ought to give you a higher ownership in the deal than if you otherwise contributed only sweat equity.  You have to figure out what percentage of the overall deal your contribution of land is worth.

As far as how it will be structured, that depends on which way you want take things.  I imagine a syndication attorney would be able to help with structuring once they understand what it is you are trying to accomplish.

Hope this is helpful!