219: Syndications: Everything You Need to Know BEFORE You Invest

You may have heard the term “real estate syndication” thrown out quite a lot over the past few years. It seems like almost every real estate investor is either starting a real estate syndication or investing in one. So what’s all the hype about? Is this an investment opportunity that you’re missing out on, and if so, is it truly passive as many people claim?
We’ve brought the master flipper, rehab estimator, and syndicator himself, J Scott, back to the BiggerPockets Money Podcast so he can share some information (and advice) on real estate syndications. J walks through a handful of points worth examining before investing in syndications. We talk about what a real estate syndication is, where to find syndications, how to validate the syndicators themselves, what a limited partner is, what a general partner is, and more.
The most valuable part of this entire episode is about researching the syndication deal itself. Where is it located, what is the structure, who’s running it? These are all questions you should ask, along with some other key questions like:

What is the team’s track record, reputation, experience?
What is the location, risks, population size, employment, wage growth?
On the deal, what do the returns look like, what are the big risks?
Do they have an investor presentation?
What’s the minimum investment?
Are there capital calls? How do they deal with capital calls? Have they required capital calls in the past?
What are their accreditation requirements?
Can you get better terms in exchange for a larger investment?
How frequent are the distributions? Quarterly, monthly, yearly?
When will distributions start? 
Will they be doing a cost segregation study?
What fees are they receiving?
When will they give updates? Monthly, quarterly?
Can you invest using a 1031 or an IRA?

In This Episode We Cover
What is a real estate syndication and who qualifies to invest in one?
What an accredited investor is and the qualifications behind it?
Where can you find syndicators?
Whether or not investors have liability if a deal goes bad
Cap rates, NOI, and valuations on large deals
How to research a syndication deal
Syndications vs. funds vs. REITs
What happens if a syndication runs out of money?
And So Much More!

Learn more about your ad choices. Visit megaphone.fm/adchoices

You may have heard the term “real estate syndication” thrown out quite a lot over the past few years. It seems like almost every real estate investor is either starting a real estate syndication or investing in one. So what’s all the hype about? Is this an investment opportunity that you’re missing out on, and if so, is it truly passive as many people claim?

We’ve brought the master flipper, rehab estimator, and syndicator himself, J Scott, back to the BiggerPockets Money Podcast so he can share some information (and advice) on real estate syndications. J walks through a handful of points worth examining before investing in syndications. We talk about what a real estate syndication is, where to find syndications, how to validate the syndicators themselves, what a limited partner is, what a general partner is, and more.

The most valuable part of this entire episode is about researching the syndication deal itself. Where is it located, what is the structure, who’s running it? These are all questions you should ask, along with some other key questions like:

What is the team’s track record, reputation, experience?

What is the location, risks, population size, employment, wage growth?

On the deal, what do the returns look like, what are the big risks?

Do they have an investor presentation?

What’s the minimum investment?

Are there capital calls? How do they deal with capital calls? Have they required capital calls in the past?

What are their accreditation requirements?

Can you get better terms in exchange for a larger investment?

How frequent are the distributions? Quarterly, monthly, yearly?

When will distributions start? 

Will they be doing a cost segregation study?

What fees are they receiving?

When will they give updates? Monthly, quarterly?

Can you invest using a 1031 or an IRA?

In This Episode We Cover

What is a real estate syndication and who qualifies to invest in one?

What an accredited investor is and the qualifications behind it?

Where can you find syndicators?

Whether or not investors have liability if a deal goes bad

Cap rates, NOI, and valuations on large deals

How to research a syndication deal

Syndications vs. funds vs. REITs

What happens if a syndication runs out of money?

And So Much More!

Learn more about your ad choices. Visit megaphone.fm/adchoices