How to approach a Syndicator for a partnership offer?

Question

Hi, I'm looking to partner with an experienced real estate syndicator for a commercial investment, let's say an executive office>medical conversion. The value exchange is his reputation for my 'everything else': finding the investors, finding the deal, gaining commitments onto the value-add prior to any money being changed hands.

Is this a slam dunk offer? Or would an experienced investor/syndicator be timid to partner with a new investor even if he does everything else? I'd appreciate any feedback you may have that would help me tailor my offer, thank you.

Ellis San Jose · Answer

I don't think it's a slam dunk.  You will have to overcome these thoughts in the  syndicators mind.

1) You will waste their time.

2) There is no apparent value you bring to the table except the promise of working really hard to find a deal.

3) You could put their reputation at risk.

4) Have no idea what you are doing & will have to be taught, & they aren't in the teaching business.

If you can show some competence on how to deliver a profitable deal under contract.   Communicate intelligently that you have a realistic comprehension of the exit strategies and what is required to get there.  Maybe someone will be willing to figure out an arrangement, when you have a deal ready to go & tied up in a bow.

Jeff Greenberg · Answer

If you can do everything else, I am not sure what you need the syndicator for.  Hiring a good SEC attorney will walk you through the process of the Syndication.

If what you lack is confidence that you can keep all of the balls in the air and pull off a Real Estate transaction that happens to include a syndication, that is understandable.

As was said earlier, you need to bring something to the table for the syndicator/mentor to risk wasteing his/her time and/or reputation.

Get educated on deal analysis, the market you are in, legal ways to raise money from investors, etc.  Find a great deal and bring it to the syndicator/mentor and show them you have something to offer.  They may take you under their wing and give you a wealth of information in return.

Bryan Hancock · Answer

So you'd be in essence utilizing his "credibility facility" and expertise in structuring deals to bring things together.  A track record is a common impediment to growth in the syndication arena and partnering with experienced folks is a good way to develop your own personal track record.

My best suggestion to you would be to demonstrate tangible value to the syndicator and be willing to push more across the table to start out with than the syndicator pushes back.  Delivering true value in the form of viable deals or investors will go a long way toward getting yourself started.

All of the objections above are completely valid.  You need to be able to demonstrate that you won't tarnish the syndicator's reputation.  The trust the syndicator has with their investors is golden and they likely won't risk it or their time if you could potentially hurt their business.

Sean Dezoysa · Answer

Great comments by all, thank you for your time. Jeff, the reason I want a co-sponsor is the credibility it will yield as I approach investors. As a new person I'm more than willing to pay for credibility.

To be clear, I will not be approaching the experienced syndicator's investors; I would source my own. And gaining their confidence is 10x easier with a track record of successful deals.

Based on everyone's feedback it looks like I should package the deal before offering it to a syndicator. This makes things a little harder in terms of timeframe because I'll have to hold off on investor marketing until I find/tie up a deal and a syndicator, but I'll do what's necessary. (On the other hand it's probably worth at least testing some syndicators for interest and specifically proving that their time/reputation will never be under any threat)

How to approach a Syndicator for a partnership offer?

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