All Forum Posts by: Theo Hicks

$250 to $300 per unit per year. 

I think the biggest pitfall is lack of transparency. 

To avoid this pitfall, send monthly recap emails to investors for each property. If a problem arises, identify the right solution as quickly as possible, and communicate the issue and the solution to your investors in the recap email.

I know of a billion dollar developer who syndicates via 506(c) and has had a lot of success advertising on Facebook!

Hi Aurelien,

In order to become a syndicator, you need to cover the education and experience requirements. Education is obvious. For experience, you need to have a track record that you can leverage to raise money (i.e., why will someone invest with you? Because you have previous success completing deals). However, if you haven't completed a MF deal before, you'll need to build a team who has. 

Then, you need to determine if you able to raise funds from your existing network.

It depends on how the process is outlined in the operating agreement. I've seen situations where the LP's can liquidate if they find someone to take their place AND that person is approved by the GP.

As others have mentioned, the cost to put together a syndication will run into the tens of thousands of dollars. So, think of the costs as an extra down payment. If the upside is high enough, the cash-on-cash return might support the added costs. But my instincts are telling me that $500k is too small. Someone who isn't syndicating will be able to submit a higher offer price because their down payment is lower.

For each fee you charge, you should be able to explain the exact duties you are performing to earn that fee. Of course, you want to make sure your fees are fair and competitive (i.e., the equity split shouldn't be 70% to you and 30% to passive investors).

One thing you might be able to help with is lead generation. Generally, a percentage of the GP is allocated to the person who finds the deal. 

Another option is to raise capital.

Hi Duke,

My recommendation is to search "list of apartment syndicators" using the BP search function. There are lots of lists where passive investors talk about the syndicators they've worked with. Then, I recommend performing deeper research on each sponsor by visiting their website and setting up an intro call.

Check out CCIM