Hello BP Community. I started in the commercial real estate world as a broker in Seattle area in 2012, which brought me to start investing in 2013. I started buying 2-4 units solo, then branched out with LLC and TIC partnerships. I've been looking to take my TIC ventures to a new level with a syndicate. I have multiple partners with large amounts of money seeking passive investment opportunities. I know the generics of a syndicate, but not much about the specifics. Where would I go to learn more about how to start structuring a syndicate? I would of course get my attorney and accountant involved, but I am still a bit before that on my personal knowledge of how they function. I am also not sure how to the debt structure works with a syndicate, would it be similar to how I secure debt with my TIC structures (all partners are on debt, for the % they own) or are most of you doing this differently? Any resources would be greatly appreciated. Thank You!
I would start out by reading some books. A couple of suggestions.
The Complete Guide to Buying and Selling Apartment Buildings by Steve Berges
It's a Whole New Business!: The how-to book of syndicated investment real estate by Gene Trowbridge Esq.
I would also listen to the many great podcasts out there - Rod Khlief, Michael Blank, Old Capital Lending, Wheelbarrow Profits, etc.
And then I would suggest that you get a mentor/coach to help you. As anti-guru BP is, this would be one of the real estate niches I think you should very strongly consider a mentor. You can try to find someone already doing it and form a relationship with them. This is the harder and slower way. Or you could pay for a coach/mentor.
Thank You, @Michael Le . I very much appreciate the recommendations. I will check out the books, podcasts you've recommended and speak with a few people I know who do commercial syndicates in my area. Cheers!
It appears we are both in a very similar stage of starting syndicate and partnerships. If you like to connect to discuss please reach out.
Wonderful, @Jamie Dietz , I will send you a connection.
I just participated in a syndication deal for a development in Park City, UT through Kathy Fetke's RealWealthNetwork.com. This week she had a podcast interview with attorney who set up that deal that may be worth a listen: https://www.realwealthnetwork.com/learn/tips-investing-syndications-gene-trowbridge/
I went to the Real Estate Guys seminar on syndication and it got we the big picture to do 5 deals.
@Zach Schwarzmiller the brokerage community will know who is putting together syndicated deals together in Washington. I would build relationships with those that have more experience. Having someone to lean on locally would be great for your growing business.
@Zach Schwarzmiller , most syndicates utilize the form of Limited Liability Companies, with the sponsor as the manager, and the investors as members. Some syndications still use limited partnership model.
The property(s) are owned by the LLC; the debt incurred is an obligation of the LLC. And therein lies the problem with smaller syndications (say under $50 million); the lender wants personal guarantees, the investors do not want to be responsible for debt in case of default. The results are a MUCH lower LTV loan than with personal guarantees - think 40% LTV vs. 70% with personal guarantees.
I am very sorry for my tardiness in thanking all of you who responded to my posting. @Lane Kawaoka your link was very helpful. I will keep exploring and learning about syndications.
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