The 6 Roles of a Syndication GP Team

A GP team typically requires fulfilling six essential roles, although these roles don't necessarily need to be assigned to six different individuals. There is often overlap and collaboration among team members. Here are the six roles:

1. The Dealmaker

If you excel at building new relationships and have a strong presence in your target market or nearby, you can be the "boots on the ground" for your team. This role involves sourcing deals by cultivating relationships with brokers in the area. Even if you live far away, you can still fulfill this role as long as you have the time and resources to travel frequently.

Building relationships with brokers takes time, and face-to-face interaction is crucial. As a beginner, it's recommended to practice by contacting brokers in markets you're not particularly interested in. This allows you to hone your skills without wasting the time of brokers in markets that matter to you. If you're not a people person but live in the area, the underwriting role might suit you better.

1. The Underwriter

Are you analytical, capable of spending hours scrutinizing numbers on a screen? If you love working with data, numbers, and spreadsheets, you might be a great underwriter. This role is vital as it involves projecting and determining target returns, influencing the property's offering price. While not everyone needs to be the primary underwriter, all team members should have familiarity with underwriting and be able to provide independent reviews.

1. The Investor Relations Manager

How extensive is your network of potential investors? As a sponsor, everyone on the team should participate in raising capital. However, if you have a database of investors ready to invest, you can add significant value to the challenging task of syndication. It's important to note that there are strict SEC rules against being solely compensated for capital raising without a broker dealer's license. So, make sure you have clearly defined and substantive duties throughout the property's hold. Being able to raise $1-2 million effortlessly is a good starting point. Avoid calling yourself a "Capital Raiser" as a sole job unless you possess a broker dealer's license.

1. The Experienced Team Member

Having an impressive real estate resume is invaluable. Experience is not something you can acquire solely from modules or books. Often, people who joined around the same time gravitate toward each other, forming partnerships and learning together. However, lacking the necessary resume for large deals can be a challenge. It's essential to network and establish connections with experienced veterans who can join you on the deals you find or bring you into their deals until you gain sufficient experience.

1. The Baller

Qualifying for a loan on large apartments requires substantial net worth and liquidity. By bringing an impressive Personal Financial Statement to the team, you can add value. This reduces the number of general partners (GPs) needed in the deal, increasing the GP returns as they are split among fewer people. Additionally, becoming a Key Principle (KP) by leveraging your net worth and liquidity to sign the loan without being a GP can enhance your resume. Sometimes, KPs receive compensation for their role in securing the loan, while others do it for the commercial loan experience. Being open about your financial strength while networking can lead to deals sooner than you might expect.

1. The Asset Manager

This role complements the Dealmaker and is typically performed by someone who lives within driving distance of the property. Although proximity is not a strict requirement, having the Asset Manager nearby can instill confidence in investors, especially during the initial stages. The Asset Manager ensures that the property management company stays on track and oversees planned renovations. They hold regular calls with the Property Manager to review Key Performance Indicators (KPIs) such as delinquencies, vacancies, and new leases.

Ideally, the Asset Manager has experience running a business or possesses a background in business or construction management. The success of the property depends on their ability to execute the business plan, leading to an ongoing Asset Management Fee (typically 1-3%) for their duties. The more experienced and proven their track record, the higher the fee they command. While you might not be the Asset Manager on your first or second deal, seize the opportunity to learn from the person who holds this crucial role and be willing to support them as a junior asset manager.