Real Estate Syndication Company | Investing Partnership

by Christopher Levarek

“No man ever steps in the same river twice. For it’s not the same river, and he’s not the same man.”

- Heraclitus

I remember getting married, now seven years ago, to my wife and long time partner. That day was filled with happiness, joy and dreams of the future. Everything that could be good and great would happen as we had found each other in a world of 7 billion people. Things could only go up from here.

Fast forward to today and we are STILL happily married. Yet, looking over our marriage, I can honestly say it hasn’t always been the way I thought it would be. Although, I would not change a thing, the picture of marriage I had on day one is greatly different then what it turned out to be!

Here in lies the point, partnerships are like this and that’s why it’s important to enter into the right ones. When it comes to a real estate syndication as a passive investor, you enter into a partnership with an investment and syndication group for typically 5 years. In the beginning, the deal and group might look all sunshine and rainbows but what do years 3, 4, 5 look like? How can you know you are investing in the right group?

Today, I’m giving three methods for picking the right investment group and ultimately the right investment. Just like marrying the right person, investing with the right group will only make the journey that much better. Let’s jump in…

Tip #1 Know What’s Important to You

Like many articles I write, starting with your goals is always helpful for answering any question. In this case, finding out what is important to you for an investment or investing partner is a good place to begin. So if you are someone who enjoys knowing all the details all the time, perhaps you want a real estate syndication company that favors frequent communication or updates.

Perhaps getting the highest return is the most important to you and so selecting a group that showcases higher returns then other groups becomes a major point of selection. There is no wrong or right answer here. It is finding those groups or deals that align with you and your needs. The closer you can get to matching up all your critical requirements, the happier you will be with your investment decision.

Tip # 2 Favor the Company over the Deal

After you define your criteria for success, I always recommend favoring the jockey over the horse as a deciding factor. What I mean by this, is choosing to decide on an investment based on the group versus the shiny investment deal. Yes, the deal should make sense fundamentally and logically from a numbers side, but having the right group or operator will inevitably make or break the deal.

Many an investor chase deals with good returns, tax benefits and preferable markets instead of focusing on the operator. All these guarantees or attractive qualities are worthless without an experienced team to make the asset management and operations come to life. So ensure you focus on the group, their core values and their track record before considering the deal specifics. Speaking of track record…

Tip # 3 Track Record in the Market

The final recommendation is to focus on track record in the market. So if you are analyzing 5 investment opportunities among 3 competitive groups, look to track record in the market as the scale tipper. Which group has or had other investments in the same market as this new offering?

Look at which real estate syndication company has existing relationships with vendors and property management matching this new deal in the market. How are the other investments in this market performing?

If you find the team is brand new to a certain market, make sure to understand their thesis and partnerships in the new market. What makes them feel they can succeed in this new market? What is their angle?

Still, it will be far easier to invest into a deal with a group, knowing this is simply the 3rd or 4th deal they’ve done in the area. So, always look to an investment group’s track record in local area and/or good existing partnerships further validating the deal success.

In Final

Picking an investment opportunity or real estate syndication company can take time and seem like an arduous task. However, just like not rushing into a marriage, it’s key to have that first date and know what you want out of the relationship. This is paramount to a happy and successful investing experience.

So, take your time and choose the right investment partner, or significant other for that matter. Trust me, you’ll be thankful you did, just as I am(in both investing and marriage)! Happy Investing!