It is true – real estate syndication is a team sport. Just like a champion sports team, a syndication business with strong synergy among players can have much more success with their investments than uninspired ones. Syndication brings the power of teamwork and allows people to combine their skills, resources, and capital to reach bigger and greater goals together than they’re able to on their own. But, how do you create such a team? What types of people should be in your lineup so that you can work together to implement your business plan?
We talked about this topic in my latest conversation with Liz Faircloth, co-founder of DeRosa Group. As a team-building and management consultant for Fortune 500 companies for many years, Liz’s skill in assessing people’s strengths and weaknesses has helped companies “put the right people in the right seats” and has helped her own company build a team that has catapulted DeRosa to success. I’d like to share some of Liz’s ideas on structuring a real estate syndication team – the types of personalities fitting a syndication team position, the challenges of finding team members, and more. You may listen to the full conversation here.
What does it take to build a successful syndication team?
Successful real estate investing requires a smart, experienced, and dedicated team of people, says Liz. While there are a lot of things that increase an individual’s potential for success – such as skills, knowledge, and experience – it is also important to know oneself and others in the team to achieve harmony and collaboration. Be conscious of a person’s personality, strengths, and weaknesses and how he or she can actively contribute to the team in order to complete tasks, manage projects, and meet goals. “There is always this part of people that helps them become successful but you can’t see it on paper all the time. There are areas in our personality that we have to watch out for and we have to manage if we want to work effectively in a team,” adds Liz.
When hiring team members, Liz advises using some assessment tools such as The Predictive Index, Kolbe, StrengthsFinder to evaluate a team member’s personality traits that could make or break a team. She recommends getting to know potential partners and teammates as real people – not just pieces of paper. “We have to build a team around these personalities, assist them to process these traits because there’s something in all of our personalities that if we don’t watch out for or keep an eye on, it’s going to bite us later. So, do something to figure out what you’re a genius at, what you’re good at,” advises Liz.
Roles of Team Members in Syndication
Liz cites three roles that they found crucial in their own syndication business. These are roles that need to be filled by a suitable personality type.
1. The Hunter
“You always need someone who finds new deals and new opportunities if you’re looking to grow your business,” tells Liz, adding that a hunter will be more aggressive, a self-starter, assertive, proactive, and may not always be the most likable person in the group. A natural when it comes to taking bold actions, a hunter may feel stifled and frustrated by a more conservative and cautious environment and will work to achieve the most exciting victories.
In syndication, a hunter can be the person who finds properties that the company invests in. The hunter’s personal connections and social relationships are what will lead to acquisition deals. With intimate knowledge of the local market, he also has a strong network to draw on to bring deals to the company.
2. The Brains
“The brains is someone who analyzes the deal, underwrites the deals, and keeps the business functioning. It’s at the helm of the syndication business,” explains Liz. The brains always asks questions and then finds their own answers through research. If information is needed to complete the project, the brains can get it for you. They have the special talent to ask often-overlooked questions that can avert future risks.
Naturally self-motivated, the brains is driven to put systems in processes and put order to the world around them to increase team efficiency. They’re dedicated to making decisions for the good of the project and can be trusted to complete and deliver your project in the estimated time. While they thrive with lists, charts, and calendars, the brains are punctual, methodical and are able to see the curve in the road, and often have strategies to deal with challenges.
3. The Money
“The money refers to the one that’s raising money for the syndication. Not that he has all the money, but he is the one that put funds together to acquire property and takes care of investors’ money,” explains Liz.
Putting investor funds together takes strong interpersonal and communications skills, the ability to effectively convey a clear and expansive vision of the project’s goals, and the skill to motivate others. Always in touch with stakeholders through various forms of correspondence, the money has the knack for building rapport and developing positive contacts to build relationships. The money is comfortable relating to other people, is at least more extroverted than they are introverted, and is approachable and likable.With a “can do, get it done” attitude, the money builds a picture of success and goals reached, which is what motivates investors and stakeholders to work with him.
“There may be more roles than just those three but we’ve built teams and defined functions around these three segments in our syndication business,” states Liz, emphasizing that it is best to be diverse with a mix of personality types for a more efficient team. “If you have three analytical people or you have three dominant people, that’s disastrous. If you all have very similar styles, that’s when teams don’t work,” she cautions.
“The biggest challenge I’ve found is that people are attracted to people like themselves,” tells Liz, observing that in networking events or conferences, extroverted people tend to connect with extroverts and not with scientific, engineering types. The reverse is also true with technical, and scientific types mingling only in their own group. She reminds us that people that are divergent and different from you are the ones that you may actually need in syndication.
An ideal syndication partner or teammate is someone who complements your strengths and balances your weaknesses to make up for the areas that you are lacking. Rather than attempting to do all tasks by yourself, find someone to do the role in which you’re weakest. As your investment portfolio grows, so will the roles that will be played by each team member and the workload that will need to be distributed.“My personal opinion is that it’s hard to grow from zero to twenty members of a team. You should grow organically and start to ask, “What am I good at? Where am I not a genius at? I’m doing all these but where can I partner or work with someone on some things? Because this is needed,” ends Liz.
Syndication teams will not always be perfect, and we won’t always get to work in a group that has every one of these personality types. But recognizing both our own strengths and those of our partners, and working together with trust, collaboration and synergy will bring us closer to our common goal. Start building your team now and start generating long-term income toward your financial freedom goal.
If you haven’t yet, today is a good day to start investing in multifamily syndication. Get started by emailing us at [email protected] or call +1 540-585-4338 to see if LifeBridge Capital’s investments are a fit for you.