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Uploaded on Feb 23, 2021
The real estate industry has been gaining popularity in recent years, particularly because of the return on investments it offers. Real estate indeed requires a great amount of capital to be invested to get a project on wheels. To rectify this drawback, syndications and crowdfunding became popular. A real estate syndication is easy and probably the best method that helps entrepreneurs raise capital to invest in promising projects. Syndication is a legal bond between syndicator and investors, syndicator being a sponsor of the deal, who finds and manages deals, and an investor is the one with capital to invest in the deal. There are several things to note before becoming a part of a real estate syndication, what are their goals, how do they function, what are their strategies, etc. In this infographic, you’ll get an idea of who all are a part of syndication, the level of their involvement, who can invest in syndication, types of syndication and investors, and much more.
The Advanced Guide to Real Estate Syndication
The Advanced
Guide to Real
Estate
Syndication
A real estate syndication is a group
of investors pooling their resources to
share the stakes of an ambitious real
estate project which is estimated to
generate over $300 billion by 2025.
Who’s involved?
General partners/Syndicator/Sponsor - Organize the syndication - Find the
property, secure financing, and manage the property.
Limited Partner/Passive Investor - Group of people who provide the cash
investment, in return receive an equity share, cash flow distributions, and
profits.
Who can invest?
SEC defines:
Accredited investors - as someone with an annual income of $200K, $300K joint income, or a net
worth of at least $1M, excluding their primary residency.
Sophisticated Investors - as someone with enough knowledge and experience in business matters
Family and Friends - as non-professional investors who provide capital based on their close
connection to the sponsor
Structure of Syndication?
Legal Entity - Limited liability company or LLC
Equity Splits - 70/30 or 80/20 between LPs and GPs respectively
Preferred Returns - Minimum paid out to the LPs before the GP is paid
Control and Voting Rights - LP is limited both in liability and control; all the decisions
are made by GP
Return of Principal - Possible through Refinance or Sale
Thank You For Reading!
To Read More, please visit: https://syndicationpro.com/the-advanced-guide-to-
real-estate-syndication
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