When you first begin to consider real estate syndication as an investment option, it can feel lonely, intimidating, or even like you’re going in blindfolded.
I personally experienced fears around investing in my syndication, thousands of miles away where I couldn’t drive by the property whenever I wanted to see it and where I didn’t have full control.
I had concerns about how I’d get my money back, and doubt around the inability to simply log into an account and see my money and immediately buy or sell if I wanted.
These fears were addressed head-on through a lot of research. Every article I read and every conversation I had built my certainty until I began to feel confident to take the plunge and make my first passive investment in a commercial building syndication in Texas.
I approached this first investment with many of the same questions that I would have if I was acquiring the property directly. What are the market fundamentals? What is the competitive landscape? How do the current rents compare the rest of the market?
After that, I had to research the sponsors who were putting the deal together. What was their experience in this market and asset type? What do their existing investors say about them? Have they made conservative projections in case things don’t go as planned?
If you’re considering investing in your first syndication and feeling hesitant, I recommend doing your research, connecting with other investors, reading about other similar deals, and taking your time to decide
1 – Do Your Research
The best way to build your investing confidence is through self-education and research. Listen to podcasts, read books, and find websites on real estate.
Equity Happens by Robert Helms and Russell Gray
Rich Dad, Poor Dad by Robert Kiyosaki
The ABC’s of Real Estate Investing by Ken McElroy
Mobile Home Park Investors with Jefferson Lilly
The Real Estate Guys Radio Show with Robert Helms and Russell Gray
Passive Real Estate Investing with Marco Santarelli
Relevant Facebook groups and forums like BiggerPockets can help you learn what questions you should be asking.
It’s likely that other people have asked about your same concerns and, just by reading through the forum’s questions and answers, you’ll gain clarity.
Sign up for various sponsor newsletters. These typically offer a lot of great educational content and let you see a variety of different investments.
Remember there are no dumb questions and that you have the right to be diligent about gathering answers to your concerns.
2 – Connect with Other Investors
A successful investor needs a supportive community, and considering that syndication is a group investment, you’ll want to get networking.
New investors will share similar anxieties, questions, confusion, and excitement. Experienced investors can provide invaluable firsthand accounts of their experience with various projects and sponsors.
Find other investors at local meetups and online forums like BiggerPockets, or by asking sponsors if they’ll connect you to their current investors.
3 – Review Previous Deals
Finding comfort with financial projections, summary data, and investment lingo may feel overwhelming.
As you review more investment summaries, you’ll start to understand the flow of the deal packages, how each sponsor communicates, and exactly which investments interest you.
4 – Take Your Time (as a step towards taking action)
New investment opportunities fill up quickly. This can make new investors panic and start to believe they are missing the best deals.
Remember, there will always be another opportunity.
Allow yourself time to complete the steps laid out here, so that when you make your syndication choice, you are confident about every step.
Many new investors research and analyze investments for years and never take the next step. Remember, you can’t make money unless you invest, so don’t stay on the sidelines too long.
5 – Considering Everything
If you take nothing else from this article, remember it’s completely normal to feel skeptical, anxious, and even timid when making your first syndication commitment.
The ability to take action is what separates the successful from those who give up.
Your first real estate syndication deal is a huge milestone in your investing journey, and, even though your head might be spinning now, this is a time to savor.
I’m here to help you along your path towards financial freedom. To get started, please call me at (408) 506-7691 or reach out via email at [email protected].