What is Real Estate Syndication?
Real estate syndication is one way to acquire the necessary funding for real estate investing. Real estate syndication is the act of pooling money from various real estate investors and taking that investment money and putting it together to fund real estate projects. The real estate projects can be anything from simply purchasing a piece of residential or commercial real estate in total or to use to subsidize the mortgage on that property. This is an ideal way for a real estate investor to acquire more property and to even better profit in several different ways.
Some of the ways to profit from conducting real estate syndication are through acquisition fees, which can range from reportedly anywhere between 1-5 percent. This simply means that the syndicator would be paid for structuring the real estate syndication deal and is general negotiable with the other investors taking part in the deal. Another way to make money is to be paid an asset management fee, which basically is about 1 percent of the gross in revenue that is made on the real estate syndication deal by serving as the manager of both the property and the syndicated partnership. Acquiring this fee will require continuous assurance that the property is being managed and operated efficiently, including managing such things as remodeling projects on the property. And a third way to make money on syndicating is through your equity participation, which can yield anywhere from 5-50 percent of your equity stake in the deal.
When it comes to listing your real estate syndication deal, it is pertinent to understand the effects of where you list that deal. Most real estate agents or companies use their own sites, which then automatically load their offers onto the nationwide website Realtor.com via the MLS real estate system. However, understand that web exposure is the most important way to get your real estate syndication deals out there and relying on just the MLS or Realtor.com is not viable. There are many websites online that offer real estate syndication exposure, and it is important to do the research to find them. Some sites will offer you the option to help launch your deals out from their site for free or for a small 1fee while others will just let you use their site as an advertising tool. It is important to get your deals on as many sites as possible, and again figuring out who, how and where to put those deals to get them out to as many sites as possible is the best way to ensure success.