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“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”

— Franklin D. Roosevelt

It’s no secret I love syndication.

I love all types of deals and have found some pretty amazing opportunities.

So far, I’ve raised over $40 million from retail investors.

Today, I want to share three powerful secrets about real estate syndication.

Let’s jump into it!

1. Finding Great Deals

The first secret is finding great deals.

Most great deals are ones that individual investors don’t hear about.

This is because most deals go off market.

If a broker has a seller, they’ll often make a phone call to the next likely buyer.

If the buyer says no, then they’ll go to the next person.

It usually takes more than two or three calls to find out who will buy that property.

These deals are kept private.

That’s just how deals are made.

There are benefits to doing things this way.

According to this study on market fund investments in the Journal of Market Economics, private deals offer more access to capital, higher risk-adjusted returns, and IPO allocations for mutual funds.1

Price is not always the most important thing, but finding the opportunity is important.

I’ll give you an example:

There was a deal I heard about once that was in the middle of closing.

The seller was leaving millions in the deal as a limited partner to help the new deal close.

But because the money was coming from the seller, the title company said no.

They wanted the money now in the escrow account.

The deal needed an investor to come in with a couple million dollars

So, a wealthy investor joined and got a $100,000 return overnight.

That’s 5% return in one day!

It would be amazing to get that kind of overnight return.

There are really unique opportunities out there if you have a good reputation as a passive investor.

You can find some great deals.

The best way to find deals is to go to networking events.

Go to conferences and meetups.

It’s a great way to meet people and find new opportunities.

If you’re a passive investor, it’s also great when you connect with other passive investors.

When you interact with other passive investors, there’s nothing to sell.

There’s no pitch.

You share who you’ve invested with and who you avoid.

Sharing experiences with other passive investors is going to help your investment journey.

2. Choosing the Right Sponsor Team

The second secret is knowing how to choose the right sponsor team.

Surrounding yourself with the right people is key to having a long-lasting investing career.

European venture capitalists are said to prioritize a good management team, according to this article in the Journal of Business Venturing.2

A good management team will impact your investment decisions in a net positive way.

When you start your search, you should look at their track record.

Take notes about their communication style.

Ask yourself (and possibly them!) the following questions:

What do they value?

Have they done similar deals to this before?

Good performance in the past can lead to good performance in the future, but not always.

It’s important to find similar values when finding the right sponsor team.

3. Understanding Exit Strategies

The last secret is understanding exit strategy.

How are you going to make money on this investment?

What’s the goal here?

And, most importantly: What are they ways that you could lose money?

I ask that last question to sponsor teams all the time.

Specifically, I’ll ask about the deal’s biggest risk.

Then, I’ll see if the risk they give me matches up with what I think.

Asking that question allows you to get a good feel for the deal.

Not every investment goes well.

You have to make sure you understand the ways you can make money and lose money.

In summary, my real estate syndication secrets are:

Finding the right deals, finding the right operators, and looking at the exit strategies.

In a way, it’s very simple.

It’s not always easy, but it is simple.

You need to find the right opportunities that make sense with your goals and your values.

Before you leave, make sure to check out our special report about inflation investing. It shares the best choices to invest during an inflationary environment.

If you are interested in investing with us, we are happy to answer any questions that you may have. Join our investment club today and we will be in touch.

Check out my bestselling book on Amazon!

Disclaimer: I am not your investment advisor. This is for educational purposes only. I am not giving specific advice on what you can do. I am simply giving my opinions.

Works Cited

1.     Sungjoung Kwon, M. Lowry and Yiming Qian. “Mutual Fund Investments in Private Firms.” Corporate Finance: Capital Structure & Payout Policies eJournal (2019).

2.     D. Muzyka, S. Birley and B. Leleux. “Trade-offs in the investment decisons of European venture capitalists.” Journal of Business Venturing, 11 (1996): 273-287.

Bronson Hill

Bronson used to work as a consultant for a medical device company but switched to investing in apartment buildings to make his money work for him. He started with a single rental property that made good money and, after some advice from a family member, moved into bigger real estate projects. Now, he's all about helping others get into this kind of investment to earn money without having to work all the time. When he's not dealing with investments, Bronson loves to travel, write songs, stay active, and help fight modern slavery through his work with Dressember. He believes in working smarter, not harder, and wants to share how that's possible with everyone.

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