Investor Resources

What is a real estate syndication?

Syndications are broken up into limited partners (the investors who bring capital) and the general partners (sponsors or managers who sign on the debt, manage operations, make all major decisions, and may also bring capital). 

There is often a time period identified in the subscription docs that estimates a time of exit, that timeframe can range from 1, 5 to 10 plus years. During that time investor capital is locked up and cannot be accessed for withdrawal.

When you are investing into a syndication you are investing into a specific asset as well as putting your trust and confidence into the general partner who is putting the deal together. You're relying on the GP (sponsor) to be able to lead the project or asset and make as much of a return to investors as possible. 

Why get involved in a syndication?

It fills a need for both sides. The sponsor group is looking for capital to do the deal, and the limited partners (the investors) are looking for a deal to invest in. So it is a mutually beneficial relationship. 

If you want to build wealth through real estate passively, being a limited partner is really the only way. If real estate is an investment and not your full time occupation being in a limited partner position makes the most sense. The important work a limited partner has to do is the due diligence on a sponsor or general partner and the investment asset or assets their capital is going into. 

The General Partner manages the asset and makes all operational decisions, they provide reports and distributions to the investors. The responsibility of the sponsor or managers is to acquire the property, find the debt to put on the property, and in most cases, sign on that debt.

They operate the property, and then when it's ready to dispose of that investment, they sell the property and they handle everything in between. 

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(45) Why do investors do Real Estate Syndications? | Dual City Investments - YouTube