Real estate syndication is a method by which a group of private investors can combine their cash to purchase commercial real estate that might otherwise be out of their individual price range. These properties include, for example, multi-family/apartment complexes, shopping centers, and office buildings.
Syndication is an investment vehicle authorized by the Securities and Exchange Commission through various regulations. Technically speaking, it is not crowdfunding investing, because the SEC has specific regulations concerning that method of raising capital, but it does have some of the same features as crowdfunding in general.
Potential investors are provided several documents that outline the details of the prospective property, the legal entities that will be created to delineate the duties of each team member involved in the process, the forecasted investment returns, and all the legal disclaimers required by the regulations. Many syndicate purchases have an exit strategy wherein the property will be sold within five to ten years, allowing the investors to realize their portion of the capital gain at that time. Cash flow not allocated to capital expenditures, property operating expenses, debt service, or other costs generated by the property are distributed to investors and syndicate managers according to a pre-set formula in the years prior to eventual sale.
Sparks Blackthorn Capital creates real estate investment syndications for the purchase of multi-family properties in various cities in the United States. If you are interested in learning more about our company, upcoming investment opportunities, or getting access to free educational resources, you are welcome to sign up for our newsletter by clicking HERE.
