When I first sat down with a friend who was syndicating a 200+ unit Apartment deal in a Georgia suburb, I was very intrigued. He was looking for passive investors willing to invest 50K or more in what was over a 10-million-dollar apartment complex. He did a great job explaining everything, but I was still very skeptical. There were way too many 0s and the end of the digits. I passed on investing in the deal.
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 a property I’d never seen, concern about how I’d get my money back, and doubt around the inability to check into it on a daily basis.
For me these fears were addressed when I decided to go to school (figuratively speaking) on the subject. I read every book and article I could get on my hands on. I listened to every syndication podcast there was. Slowly but surely, I began to feel confident toward making the move.
If you are looking to invest in your first syndication, I recommend taking your time to doing your research, connecting with other investors and reading through previous deals. The best way to build your investing confidence is through self-education and research. There’s a lot of online resources and local meetups that are very helpful. Read books, listen to podcasts and find websites on real estate.
Here are some resources that helped me get started (also listed in my previous post. Also read more on how I ramped up the real estate learning curve?
- The ABCs of Real Estate Investing – Ken McElroy
- What Every Real Estate Investor Needs to Know About Cash Flow… And 36 Other Key Financial Measures – Frank Gallinelli
- Best Ever Apartment Syndication Book – Joe Fairless
Review lot of deals and find comfort with financial projections, summary data, and the investment lingo. 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.
It is completely normal to feel nervous, skeptical and intimated when making your first syndication commitment. But once you’ve taken some time to self-educate yourself, you would be well on your way to earning passive income from these opportunities. How do I know? Been there, done that.
At Smart Capital we help busy professionals diversify their investment portfolios through investing passively in real estate syndications. To learn more check out Passive Investing U.