Real Estate Syndication Manual

Introduction

Real estate syndication is a large part of the real estate rental market place. Most people only hear of the Real Estate Investment Trust (REITs) that are publicly traded. There are many more companies that quitely operate in this real estate investment industry. These private placements are being invested in by individuals, insurance companies, retirement systems and foreign companies, to name but a few.

These companies are investing in all forms of income producing real estate, apartments, office buildings, malls, strip centers, medical buildings, industrial space, warehouses, factories, restaurant buildings, homes, bare land, cell towers plus every manor and use of real estate that you can imagine.

You can start a real estate syndicate and invest in income producing real estate too. It is rather simple once you master the paperwork. Find investors, buy an income producing property, take it to its highest and best use, (maximize the net income) and then sell it at a profit sometime in the future. That's it, all there is to it. This process will test all of your real estate experience and management skills. You will soon find out if you are as good as you think you are.

Real estate has two big advantages when it comes to investing. First, everyone needs or uses real estate.

Second, there is a huge group of people and organizations just waiting to assist you. So there you are, you have a huge supply of available properties in every imaginable condition and price range to choose from, lots of available help, a huge demand, and you.

This manual, such as it is, will hopefully give you a place to start. If you get stuck you can always hire me as a consultant. Having said that the process is not difficult. Finding a suitable investment property that meets your criteria and making it make money is a different matter. Assuming you have some experience in finding properties, analyzing the properties profit potential, and then managing for the intended results, this manual and the article on "The making of a real estate limited partnership" will get you somewhat familiar with the process.

Real estate syndication is accomplished in phases. The syndicate is planned out, you locate your investors, you find a suitable investment property to acquire that meets your goals, you manage the syndicates affairs and finally you dispose of the investment and close out the syndicate.

Finding investors is the had part. Before you start that you need to know the paperwork inside out and backwards. Getting people to invest is a sales job and you will need to instill confidence, knowing your stuff goes a long way to doing just that.

Doing the paperwork is a frustrating process until you learn it. The problem is what comes first, the chicken or the egg. You can't do the prospectus until you find a property and do the financial analysis, you can't do the numbers until you get a loan commitment, you can't do that until you know how much money you will get from investors for the down payment, and so it goes. Here is the solution, just start, anywhere you start is OK. I started by taking one of my existing properties and acted like I was syndicating it. I spent weeks working trough the process and one day it all fell in place. I now had a sample of all the paperwork to talk about and show around to get a list of prospective investors.

Because so few people have any experience with private real estate syndicates I became an instant expert and so will you.

So go make some money.

I recommend two books for further study: Multi-Family millions by David Lindahl and Principals of real estate syndication bu Samuel K. Freshman.