Real estate investment is a big deal and can help you generate a passive income and grow your wealth in many ways. But the real estate investment world can feel like you’re navigating a labyrinth if you’re not experienced in the space.
Many people become so overwhelmed with the options that they end up leaving their money in a savings account – and risk losing money over the long term due to inflation. Otherwise, they may choose to invest their funds in the stock market and pay hefty capital gains tax on appreciated assets.
That’s why so many busy professionals prefer to invest in real estate syndications: it offers the opportunity to earn a passive income while gaining equity in a property that will appreciate over time. It’s simply easier to grow your wealth that way.
Once you’ve decided that a real estate syndication investment is a suitable vehicle for your financial aspirations, the next step is finding the right opportunity for your lifestyle and your investment goals.
In this blog post, we’re going to look at how to find real estate syndication deals, and discover the difference between various approaches to real estate syndication opportunities so you can find the best fit for your financial aspirations.
The Pros and Cons of Real Estate Syndication
You’re no fool. You are well aware that any investment comes with a degree of risk. Syndication investments are not totally resistant to risk either. Taking part in a syndicated deal may offer you the balance between risk and benefits you need to progress towards your financial goals and fit this easily into your lifestyle. Let’s take a deeper look at what this may look like.
There are many ways to approach real estate investing through syndication deals. In general, syndicates offer investors a passive income as they gain equity in a physical asset that will appreciate over time.
By pooling funds together with other investors, you have the chance to secure lucrative property deals that any individual in the syndicate may not have financial access to if they chose to invest on their own.
If you’re already invested in stocks and bonds, entering into the property market creates huge diversification benefits to your portfolio, including but not limited to hedging against inflation. Investments that perform well in the property market have significantly reduced capital gains tax implications than successful investments in the stock market.
On the flip side of the coin, many syndication deals require higher minimum investments than stocks and mutual funds. In many cases, the lowest entry point could be as much as $30k which is not accessible to everybody.
Many real estate investors who do not have this capital readily available may choose to sponsor a syndicated deal and raise capital from private passive investors. However, the time commitment required to manage and successfully pull off a syndicated deal – not to mention the requisite experience and skill needed to make a profit from it – can be far too great of an ask for a busy professional in the modern world.
So how can you find a balance between managing your time and your money effectively to work steadily towards your financial freedom and secure your future? Read on to discover a few options for you to consider.
Partner With Professional Syndicators
One of the most advantageous aspects of entering a syndicate with professionals is simple: the pros know what they’re doing. A reliable record of experience is a powerful credential when it comes to syndicating a real estate deal.
When you choose to partner with professional syndicators, the experts act as general partners and you take the role of a passive investor. This is a preferred option for many modern professionals who don’t have the time or expertise to navigate the complex property market because it removes a significant amount of risk associated with first-hand experimentation. Professional sponsors know the market, understand how to structure a syndicated deal, and have extensive experience with due diligence.
If you’re looking for a professional syndicator it’s important to consider the company’s track record, how much experience the team has, and what kind of investment opportunities are being offered.
You may want to think about how much money you need to invest, and how long you will have to wait before you see a return on your investment in order to understand whether the opportunity suits your needs.
The Transformative Power of Real Estate Platforms
People’s Capital Group has designed a simple and accessible way for regular people with active lives to grow their wealth by taking part in syndicated real estate deals. With over 30 years of experience in the field, we have dedicated thousands of hours to creating connections in the real estate industry and mastering the art of finding and managing hundreds of successful real estate deals.
The company expertly combines extensive practice in due diligence with proficient real estate management. Investors can trust their money is in the right hands, without the time and responsibility commitment of managing the syndicated deal themselves.
With as little as $30k, investors can participate in a professionally managed syndication deal over the mid-term. Clients typically invest passively for 3-5 years, after which they can claim their profit or reinvest their funds.
It’s easy to get started: simply fill out the online qualification form, then discuss your investment credentials and financial goals with People’s Capital Group. Once you are approved and invested, you can start to enjoy regular passive income.
If you’re looking for an accessible, reliable, and low-risk entry into syndication without the hassle and time commitment of managing the deal yourself, partner with People’s Capital Group today.
Building your network of investors is another great way to find real estate syndication deals. By creating a network of like-minded syndicators and investors, you gain access to a steady stream of deals. Real estate syndicates have a capital-intensive nature, so their success is predominantly built on trust and human connection.
Perhaps you already know real estate investors in your personal and professional network who can lead you to real estate syndication opportunities. If not, it may be a good idea to reach out and meet industry professionals who can connect you with those who have experience in the market.
Ask around for referrals, and be sure to do your research and pay due diligence before taking part in individual deals.
Where Can I Build my Network?
One of the best places to start building your real estate network is by using professional networking platforms. By scouring sites like LinkedIn, you can find syndicators and passive investors you may wish to partner with for a real estate deal.
These sites are a great way to learn about the industry as well. You will discover local and online meet-up groups where investors discuss upcoming opportunities and successful strategies they have discovered, exposing you to a greater amount of real estate investment opportunities. By joining groups like this, you’re more likely to make valuable connections that can help you move forward into individual deals.
What do I Need to Know Before I Begin?
The Securities and Exchange Commission recognizes two types of investors: accredited and “sophisticated”.
Accredited investors are individuals who meet a predetermined threshold of annual income or net worth. Those who comply with these requirements are considered to have less risk when entering into a syndicated deal because they are more financially capable of cushioning the financial risk of the investment themselves.
Sponsors prefer accredited investors because it means they have fewer regulatory loopholes to incorporate you into their investment project. It also indicates that the sponsor holds a reduced fiduciary responsibility to you.
“Sophisticated” investors are individuals who do not meet the annual income or net worth criteria as prescribed by the SEC. It’s still possible for “sophisticated” investors to participate in an individual real estate syndication deal. However, it requires the sponsor to undertake greater financial risk toward the non-accredited or “sophisticated” investor and entails additional paperwork and regulatory enforcement.
Real Estate Investment Forums
Another place you can search for real estate syndication deals is by joining a discussion on the topic. Real estate forums are places where investors come together to discuss openings, share experiences and information, and learn from one another. Here are a few places you can look to discover a real estate forum that will help you step closer to your financial goals.
Search the Internet
Conducting an online search with keywords that outline the kind of forum you seek and your area of interest, such as ‘real estate syndication New York’ and ‘real estate investment deals,’ will likely lead you to the type of forums you are interested in.
There are many real estate groups out there, so it may help to narrow them down to congregations in your area so that you have greater access to opportunities offered locally.The easiest way to start is by entering relevant keywords in Google or Facebook with the area where you live.
Join a Group on Social Media
There are many existing groups on social media websites such as Facebook, LinkedIn, and Instagram where you can take part in local real estate discussions. It’s common to find groups that focus specifically on syndication deals.
If you’re unable to find a local group on social media that suits your needs, it’s worth considering searching further afield or initiating your own local real estate syndication interest group to connect with like-minded investors.
Attend Events in Your Community
Local real estate professionals, brokers, or community events websites may be able to lead you to meet-up groups where you can set about looking for real estate investments. The added bonus is that you will be able to meet in person, so you can already begin to foster connection and trust with potential partners from the beginning. Meetup.com is a good website to find these local events.
Any event ranging from conferences and seminars to casual lunch gatherings are great places to connect and start building relationships with prospects, depending on the real estate investment goals you have set for yourself.
Joining a forum and meeting locals who share similar investment aspirations to yours is a strategic place to kick off for investors who want to know how to find real estate syndication deals. Keep in mind that you need to build significant trust with partners before entering into a private syndication deal, as a large part of your financial risk lies in the competency of your sponsor. It’s key to pay thorough due diligence before committing to anything to mitigate your risk.
Join an Online Crowdfunding Platform
There are many approaches to joining existing syndications, but what about when you have already found a deal you wish to pursue? If you have already found a great real estate investment opportunity and are looking for a sponsor or passive investors to partner with, how about pitching your idea on real estate crowdfunding platforms?
Many professionally managed crowdsourcing companies invite investors to advertise a deal they have found from their platform. It can be a great way to meet others interested in contributing their capital to your project.
Once you have had your project accepted by the online crowdfunding platforms, you simply need to gauge the interest from other investors. If you can raise enough capital to secure the deal, then you’re on your way to syndicating an investment yourself.
How Can Crowdfunding Benefit You?
When you take a real estate venture or idea public, you will get an indication of whether your idea will work well in the market based on the amount of interest you garner.
This also serves as an alternative financing option if you have struggled to secure funding through banks or other traditional financial lenders. More experienced investors can offer you invaluable feedback and expert guidance regarding how to improve your strategy and approach.
If your submission is accepted and you manage to secure the funds required for your deal, congratulations! You’ve not only found a syndicate to take part in, but you’ve created one all in the same hit.
Things to Watch Out For
Raising equity through real estate crowdfunding platforms can be hugely successful if you play your cards right. However, it rarely works out to involve less effort than securing financing with traditional lenders.
Keep in mind that not all submissions are accepted by crowdsourcing platforms, and it usually takes experienced and sophisticated investors to structure a submission correctly. If you have not protected your business idea by patent or copyright, taking it public may expose it to the risk of having someone else steal your concept.
If you are the sponsor of your deal, you will be required to commit significant ongoing time and energy to manage the project as well as investor relationships, which may not be in the best interests of busy professionals.
Where can I find real estate investment deals?
There are many places you can find real estate investment deals. You can look for a professional real estate investment platform, network with other investors and sponsors, or you can try to create your own real estate syndicate by advertising your own project on a crowdfunding platform.
Where can I find real estate deals in a hot market?
The best place to find a real estate deal in a hot market is to look to the experts. Professionals who work with real estate platforms have a deep understanding of the local market and are experienced in structuring and managing real estate deals. This way you know you are sourcing the best deals available, and are more likely to maximize returns on your investment.
It’s common for modern professionals leading busy lives to find themselves wondering how to find a real estate syndication deal that can work harmoniously with your lifestyle and carry you towards your financial goals. The good news is there are many approaches out there for getting into a real estate syndicate.
For those who feel more aligned with a private deal, it’s critical to build extensive trust with the sponsor and passive investors and to pay thorough due diligence to both the deal itself and the parties involved. Accredited investors will find it easier to enter into this kind of venture.
If you prefer to partner with a trusted and experienced company that will manage your funds in a low-risk professional syndicate, contact People’s Capital Group today. You can have confidence that your funds are in competent hands, while you build wealth for your future.