What is the real estate syndication cycle? 

In a typical real estate syndication, individual investors’ funds are combined with a sponsor’s management. It is composed of the following three stages: 

1. 1. Origination (planning, purchasing property, completing registration, and disclosure)
   2. Operation (the sponsor typically oversees the management of both the syndicate and the real estate)
   3. Completion or liquidation (resale of the property).

What is a real estate syndication?

A real estate syndication is when a group of investors pools together their capital to jointly purchase a large real estate property. Apartments, mobile home parks, land, self-storage units and other real estate assets are some of the investment opportunities available through real estate syndications.

What are the key factors I need to know before entering syndication? 

If you are to summarize the whole process of real estate syndication, look at three main criteria for you to keep on track: 

1. 1. Projected hold time (projected hold time is the amount of time we plan to hold the asset before selling it.)
   2. Projected cash-on-cash returns (also known as the cash flow, which makes up the passive income you receive during the duration of the investment.)
   3. Projected profits at the sale of the asset 

What are the possible fees I need to know? 

Here are some of the typical fees you will encounter in real estate syndications: 

1. 1. Acquisition Fee: An acquisition fee in real estate serves as compensation for finding the deal and structuring the real estate syndication.
   2. Asset Management Fee: The asset management fee is a continuous charge paid to the real estate syndication company to manage the property.
   3. Refinance Fee: Refinance fee is also known as a capital event, where a fee is charged to compensate for the time spent to refinance a property.
   4. Loan Guarantee Fee: A syndicator may use a person with a high net-worth/balance sheet to sign on the loan to receive the most lucrative financing terms for the property. If this is the case, this could result in a guarantee fee.
   5. Construction Management Fee: Real estate syndication companies do not typically charge construction management fees; instead, these fees will be billed from a third-party construction management firm that is in charge of the property’s capital improvement process. 

Does it require a minimum amount of investment or does it depend on the deal? 

While some real estate investment platforms will accept smaller investment amounts, most private real estate syndications begin at a minimum investment of $50,000.

What is the projected hold time in a real estate syndication? 

A typical commercial real estate investment has a predefined holding period, usually somewhere in the three to ten year range.