A real estate syndication is when a group of investors pool together their capital to jointly purchase a large real estate property. Apartments, mobile home parks, land, self-storage units and other real estate assets are some of the investment opportunities available through real estate syndications.
Our Typical Structure
Our structure, which can sometimes be referred to as the waterfall, or the how, when, and to whom funds are paid in our syndications typically looks like this: 70% of the ownership in the apartments belongs to the Limited Partners (LPs), with the remaining 30% being owned by the General Partner (GP). The first seven percent of all profits will go to the LP, this is known as the preferred return. Above that seven percent, it is split, with a percentage continuing to go to the LP, but this time with the GP, or the Sponsor, receiving a small portion as well. This method ensures the LP is the first to get paid, while the GP is still incentivized to increase profits.
Once our team finds a property that meets our underwriting criteria, we create an Offering Memorandum (OM). This OM is presented to our LPs as an investment opportunity, which will detail what the payouts look like, answer general questions about the property and economic area, etc. Our deals have varied; however, generally, payouts occur either monthly or quarterly, with our investors being set up with an investor portal that allows them to track the asset's performance. Once the deal is closed, we provide ongoing newsletters and communication to ensure you're kept apprised on how we are doing managing the asset.
Quick Tip!
Trying to raise capital for a deal you've found? Maybe you're partnering with one or two others to take down something larger than you can afford? Here are a few ways we've been able to successfully raise capital for slam-dunk deals.
Be straightforward about your intentions, and be frequent while communicating to prospective investors. Even before a deal is made, you should be feeling the waters out to determine interest.
Learn how to easily communicate where an investor's money is going, how it's paid out, and when they will see it. Don't overcomplicate things.
While an investor is investing in the deal, they are also investing in you, your reputation, your ability to lead the asset management cycle, and to maintain the highest levels of integrity. Be a good steward of their trust.
How do you fit in to our model?
Generally speaking, there are two methods of investment. The first is as a Limited Partner (LP). This is a passive method of investing that enable us to do all the work, from start to finish on a property, while you sit back and reap the profits. You will be kept apprised on how the asset is performing and know exactly what your money is doing at any given time. The second method is as a Co-General Partner (GP), this method brings you alongside us as we search and underwrite deals, it involves frequent communication with attorneys, tax professionals, brokers and investors to close on a deal, then manage the asset thereafter. Whether you're interested in an LP or a Co-GP deal, we want to hear from you. Click the "Invest With Us" button above and we'll set up a call to learn more about your vision and investment goals.
