T
he first step to becoming a real estate syndicator is learning as much about the process of real estate investment and finance as. You must become an expert in everything from market trends to how mortgages work. This will require you to do some research before diving into any deals. The second thing you should do is find other people who are interested in getting involved with this type of investing. If you can’t find anyone, then consider reaching out to your family members or friends for help finding others that might be willing to offer their time and funds for your next deal!
Starting a Real Estate Syndication Company
The first step to becoming a real estate syndicator is learning as much about the process of real estate investment and finance as. You must become an expert in everything from market trends to how mortgages work. This will require you to do some research before diving into any deals. The second thing you should do is find other people who are interested in getting into this type of investment. If you can’t find anyone, then consider reaching out to your family members or friends for help finding others that might be willing to offer their time and funds for your next deal!
The next thing we recommend is setting up a company. A real estate syndication firm will allow you to take on multiple deals at once while also providing the necessary paperwork to help you through the legal documents and transactions. A corporation is also beneficial because it protects the investors from any liabilities. It’s a good idea to look into both an LLC and S-Corp so that you can choose what works best for your situation!
How Does a Real Estate Syndication Company Work?
The process for a real estate syndication company can vary depending upon the firm and their individual preferences. Generally, though, when you reach out to them they will provide you with some basic paperwork that should be filled out before going into any deals. The documents could include things like personal financial statements or LLC agreements so it is important to get these squared away before proceeding. Once the paperwork is complete, you will be provided with a list of investment opportunities and it’s up to you which one(s) that you want to pursue.
Once an opportunity has been selected, your company may take care of some tasks for you like finding tenants or providing financing options. Either way, they should have documentation that all investors have to sign off on before the deal can proceed.
For a real estate syndication deal, each investor must understand what they are getting into and how their investment will be managed going forward. This includes understanding all of the potential risks involved with the project as well as any exit strategies for your company if things don’t go as planned.
The Advantages and Disadvantages of a Real Estate Syndication Company
The advantages of a real estate syndication company are plenty. You’ll have built-in access to property management professionals as well as financing opportunities that might not be available elsewhere, and you won’t need to do any advertising or marketing for your deal since the firm will take care of this on its own.
One major disadvantage is that you need to raise a significant amount of capital to be a real estate syndicator.
Another disadvantage is that the firm might not have your best interests in mind and may steer you towards deals with more risk than others, which can lead to losses for investors down the line.
Steps to Become a Great Real Estate Syndicator
1. Select an Asset Class
– Commercial
– Residential
– Multi-Family
2. Educate Yourself In That Asset Class
– Read books
– Attend seminars
– Take courses
– Study successful people in the industry to learn from their successes and failures.
The more you know about that asset class, the better your decisions will be when investing because you’ll have a deeper understanding of what’s going on behind the scenes.
3. Learn to Brand Your Business
– Create a website
– Write articles about your experience in the industry, and publish them on your site or other sites. This helps grow credibility for you as an expert in the field and establishes yourself as someone who has value to offer others by sharing what they’ve learned so far.
4. Choose a Business Model
– You’ll need to determine if you want to be a generalist or specialist.
– If you’re starting and have no idea what the best choice for your business model is, choosing “generalist” will give you more opportunities because it doesn’t limit you like becoming specialized in one area of real estate investing does.
5. Educate Yourself on Syndication
– You can start by looking at your options for syndication.
– There are three types of real estate syndications: JV, general-purpose, and equity participation.
– The type you choose will depend on the amount of money that you have to invest as well as what kind of investment style is best suited for you.
6. Start Analyzing Deals and Making Offers
– The next step is to start looking at deals.
– You’ll want to analyze the market and make offers on properties that interest you, even if they’re not a good fit for your business model or syndication type.
– This will help you learn more about how real estate transactions work in general before making an offer.
7. Get a Property Under Contract
– It will take time to find a property that fits your needs, but once you do, it’s important not to let up.
– Keep negotiating and try for the best possible deal.
– Eventually one should come through because there are many properties out there with different owners looking for an investor or partner like you.
8. Hire the Right Attorney
– You’ll need to hire a lawyer who specializes in real estate transactions.
– The right attorney can help you make the best offer and avoid any mistakes that might cost your business ordeal.
– Additionally, they will have experience with all of the legal paperwork involved in purchasing properties, including disclosure statements, title insurance policies, etc.
9. Do Your Due Diligence
– Do your research and know what you’re buying.
– Seek out professionals who are knowledgeable about the property – architects, contractors, engineers, etc.
– Learn everything there is to know about zoning laws in that area so you don’t find yourself with an unbuildable site or one too close to a noisy airport runway.
Final Thoughts on How Do You Become a Real Estate Syndicator?
In short, syndicators are the ones that turn small investments into big returns. If you can see a way to make your money grow and don’t mind taking on some risk by investing in real estate, then this could be right up your alley! Remember to keep educating and learning about the process, your deal partners, and the property that you’re looking to buy.
Do you want to learn more about how do you become a real estate syndicator? Check out these Best Books on Real Estate Syndication.
Meet Maurice, a staff editor at Bigger Investing. He’s an accomplished entrepreneur who owns multiple successful websites and a thriving merch shop. When he’s not busy with work, Maurice indulges in his passion for kayaking, climbing, and his family. As a savvy investor, Maurice loves putting his money to work and seeking out new opportunities. With his expertise and passion for finance, he’s dedicated to helping readers achieve their financial goals through Bigger Investing.
