Are Real Estate Syndications Good For Deal Funding?

Financing, Hard Money Lenders, Private Money
1

Hello to all,

I’m currently a residential investor seeking in transitioning to the commercial realm. I turned to you all for your opinions and wisdom.

As real estate investors, we know that funding is sometimes the biggest obstacle to close real estate deals. In some cases, we cannot structure large deals like new developments, condo conversions and commercial construction with paying out simple interest payments of on projects.

For some time, gurus have taught methods for raising money being rehash of the same technique of mailing postcards or running newspaper ads and giving your sales pitch at a luncheons offering simple interest. That’s it. Two ways to find money partners and one way to structure deals.

What if instead in relying Banks, Seller Financing, Hard Money Lenders, Commercial Brokers, venture capitalists and angels. And, simply fund real estate ventures through syndications.

I have been researching this funding avenue for some time, but, I have not found the cons and pros of real estate syndications.

2

Pros: If you know people with money you can raise a lot. Acquire larger properties/deals you couldn’t have done yourself. Spread risk out among many.

Cons: Give up ownership of your project. Highly regulated if you get into REITs and UPREITs. Opinions are like a**holes, everyone’s got 'em.

3

Have you heard any of Alan Cowgill’s materials on raising private money? He has some articles on this website I believe.

Check with an attorney about advertising to solicit investors, since this is regulated by the SEC and they do have rules to follow.

4

I recently read a book that has a whole section devoted to this. Extremely informative and easy to understand, if you want the title let me know.