Your commercial real estate syndicator is the key to your investment success. They bring the intellectual capital required to identify viable opportunities, invest wisely, and deliver positive financial outcomes.
So how do you find this ideal syndicator? It starts with knowing the characteristics they should have.
Knows the Market
Successful real estate syndication requires that the syndicator is very familiar with the geographic area where they maintain real estate projects. They should understand the basic demographics, plus any economic, regulatory, and market shifts that may be happening in the area.
Is there local population growth? Job growth? Diversity in housing needs? Ask the syndicator how they stay on top of news about their investment projects.
Knows the Basic Legal Issues
Your syndicator definitely doesn’t need to be a lawyer or realtor, but they should be familiar with real estate laws and regulations. They should have a solid real estate background as it relates to investing.
This type of investing can involve landlord-tenant laws and contract law. Your syndicator should have a firm grasp of the most relevant rules for commercial real estate.
Understands Tax Implications
Real estate investing comes with certain tax implications. There are many tax benefits and you’ll want your syndicator to know how to help you take advantage of them.
Investors in real estate syndications have mostly tax-free use of the distributable cash flow from their investments. You could also see significant financial benefits when the property is sold or refinanced.
Uses Waterfall Structure
The waterfall structure is the gold standard of structures in real estate syndication. Download our whitepaper, A Guide to Passively Investing in Commercial Real Estate, to learn more about this syndication structure.
Is Talented at Adding Value
Adding value for investors is the primary goal of a commercial real estate syndicator. They should know how to identify opportunities in the marketplace and instantly see potential value in undervalued properties.
This requires a special blend of financial knowledge, marketing savvy, and real-estate development skill. Your syndicator should be a champion for the project, building value at every opportunity. Ideally, they have a methodical approach to value-building that delivers results.
Invests in Multifamily Housing
Multifamily housing provides a huge opportunity for commercial real estate investors. These projects are less affected by economic downturns than other types of investments and can bring huge returns over the long term.
This is why it’s worth asking: Does your syndicator handle this type of lucrative project? If not, why not?
Active and Enthusiastic Participant
Syndicators share in the returns on commercial real estate investments. This makes them financially invested in the project, which works to your benefit.
Your syndicator should have enthusiasm for the work and be paying 100% attention to it because your role is that of the passive investor.
Ethical and Personable
You need someone you can trust. They should have a history of successful projects and recommendations from other satisfied clients. Good communication skills are also a huge plus because you’ll want to know what’s happening with your investment.
Finally, the syndicator should be able to provide a large portfolio of successful projects. Ideally, they would share the financial details of their past projects so you can understand how their syndicate works.
Review these projects and see if they’re the right match for your investment approach. With the help of the right commercial real estate syndicator, you can develop a passive income that serves you well for years to come.
For More Information
Whitney Sewell and Life Bridge Capital can fully meet all of the criteria described above and we will help you find success in real estate syndication. Contact Life Bridge Capital to start your real estate investment journey.