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How to Find Real Estate Syndication Deals

If you have decided that real estate syndication seems like a right fit for you and your money, the next step is finding the right opportunity. While real estate syndication can be a great way to generate passive income, it’s important to do a little research upfront to find a sponsor and a project that best meets your needs. Here’s how to find real estate syndication deals that are best for you.

Life Bridge Capital is a leading real estate syndication company. We offer our investment partners the opportunity to leverage shares of multifamily rental properties into a passive monthly income. Learn More

What is Real Estate Syndication?

Real estate syndication is a form of real estate investment where a group of investors contribute to a larger real estate project. A project sponsor runs the syndication and is responsible for the hands-on work of arranging the transaction and any subsequent property management, repairs, maintenance, and property sale. Investors make money from rent collection and an eventual property sale depending on the terms of the deal.

As the sponsor handles all of the legwork, investing in a syndication is a great opportunity to generate passive income. Another key benefit is that it allows investors to take part in larger projects than they might not otherwise be able to take part in due to a lack of capital.

Accredited vs Unaccredited (Sophisticated) Investors

Syndication investment opportunities may vary depending on whether the investor is accredited. An accredited investor is a person or entity permitted by the SEC to invest in unregistered transactions.

You qualify as an accredited investor if you meet one or both of these characteristics:

  • You earned income that exceeded $200,000 (or $300,000 with a spouse) in each of the prior two years, and you have a reasonable expectation of earning the same or more in the current year
  • You have a net worth of over $1 million, either individually or jointly with a spouse (excluding the value of your primary residence)

Accredited investors have more avenues for finding real estate syndication opportunities, because they are seen as more valuable investors. They are more valuable because the sponsor has to deal with less red tape when working with an accredited investor.

Some syndications may place caps on the number of unaccredited investors (aka “sophisticated” investors) that they will permit in a transaction. That said, some syndications do work with both accredited and unaccredited investors. There are certain rules and regulations when it comes to sophisticated investors, so be sure to ask a potential sponsor about these requirements. Unaccredited investors may have less syndication opportunities open to them.

At Life Bridge Capital, we work with both accredited and non-accredited (sophisticated) investors to invest in multifamily opportunities. Learn more.

How to Find the Right Real Estate Syndication Opportunity

Finding the right syndicate can be easier said than done. When you do find opportunities, it is important to carefully vet them before investing. Here are some ways to discover new opportunities:

  • Online platforms. Accredited investors can take advantage of several online platforms to find real estate syndication opportunities. CrowdStreet, FundRise, and RealtyMogul top the list of places to search due to the ease of use, variety of investment options, and quality of investments.
  • Forums. Accredited investors often have more weight on online forums that connect real estate investors and others in the industry. BiggerPockets is one such dedicated forum for like-minded real estate investors to meet.
  • ●        Networking. Both accredited and sophisticated investors may be able to find sponsors by networking, but this option can take much longer than simply logging in to one of the options mentioned above. If you can create an inroad to the community of real estate professionals near you, you will have your ear to the ground for some opportunities that may not be listed online.
  • Contacting Syndicates. If you’ve found a reputable syndicate, consider reaching out to them directly to learn about their upcoming opportunities.

To obtain information on future investment opportunities with Life Bridge Capital and begin the conversation about possibly partnering with us, contact us today!

Real Estate Syndication Opportunity Analysis

Once you’ve found a real estate syndication opportunity, it’s important to carefully vet the proposed deal. Not all real estate syndications are created equal, and there are several vital terms and conditions that drastically change the value of a syndication investment:

  • 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.
  • Syndication fees and expenses may be fixed, a percentage, or on-demand. Be aware of which option you are signing up for. An investor who fails to carefully read the syndication documents may suddenly find themselves on the hook for unexpected fees.
  • Property type is another important consideration when vetting syndication opportunities. Multifamily housing, for instance, is considered one of the most reliable forms of passive income, but syndicates may focus on other types of properties as well.
  • Equity split refers to the potential to earn a portion of the proceeds at the time of a property sale. Many syndication projects terminate at the time of sale, so be sure to understand how you might profit at that time according to the terms of a potential deal.
  • Sponsor investment is an important consideration. You will want to know how hard the sponsor will work and how confident they are in this property. If a sponsor is not investing any of their own capital into the project, they have very little to lose if the property is a flop.
  • Sponsor experience can be a good indicator of the success of future opportunities with the sponsor. When considering joining a syndicate, look for a comprehensive portfolio of successful projects.

Final Thoughts

Both accredited and unaccredited investors can find real estate syndication opportunities that can be a great way to generate passive income. When you find a potential deal, be sure to perform your due diligence before investing to make sure it is the right fit for your goals.

Life Bridge Capital is a leading real estate syndication company. We offer our investment partners the opportunity to leverage shares of multifamily rental properties into a passive monthly income. Learn More

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