Most people are aware that they could invest in real estate. They know the basic process of buying residential property – how to pick a nice neighborhood, determine how many bedrooms or bathrooms they want, find a lender, broker, tour properties, make an offer, and ultimately buy a single-family home or rental property. 

Real estate syndications (group investments) are an entirely different ballgame! The process often feels mysterious, especially to beginners or first-timers who have never invested in commercial real estate syndication opportunities before.

Since you’re unlikely to just jump headfirst into a real estate syndication without knowledge of the process and what to expect, I’m happy to walk you through the process in the article below.  

After reading these step-by-step instructions (don’t worry, they’re not complicated!) and booking a call with me, you will be able to invest in your first multifamily syndication with confidence.

Basically, there are five steps to invest in a real estate syndication: 

1. Determine your investing goals. I use SMART goals:
2. Specific
3. Measurable
4. Attainable
5. Relevant
6. Time Based
7. Find an investment opportunity that fits your SMART criteria
8. Reserve your spot in the deal
9. Review the PPM (private placement memorandum)
10. Send in your funds

Step #1 – Determine Your Investing Goals

Once you decide you want to invest in a real estate syndication, consider both your short-term and long-term investing goals so you can be sure to find investment opportunities that best fit your personal goals.

Think about the amount of capital you have to invest, the length of time you want that capital invested, tax advantages you’re looking for, and whether you are investing primarily for ongoing cash flow to help offset your income, long-term appreciation, or a hybrid of both.

Step #2 – Find a Fitting Investment Opportunity

Once you’ve determined your investing goals, aim to find a deal in alignment with your goals. 

There are countless real estate syndication opportunities and markets out there. If you’re looking for recession-resistant multifamily investments, we can help you surface the strongest and most viable opportunities.

We will typically provide an executive summary, full investment summary, and host a webinar for investors, which provides a full 360-degree view of the asset, the market, the deal sponsor team, the business plan, and the projected financials.

Be sure to take time to properly vet the track record of the operating team, ask them your questions, and read between the lines of any investment materials provided. Take a look at things like whether the business plan has multiple exit strategies, whether there are signs of conservative underwriting, and double-check whether the proposed business plan makes sense given the asset class, submarket, and current economic cycle. 

Research market trends in job and population growth. Review minimum investment requirements, projected hold time, and projected returns. Finally, attend or review the investor webinar and make sure you get your questions answered.

Basically, at this stage, look for any reason not to invest in the deal.

Step #3 – Reserve Your Spot in the Deal

Once you’ve found an opportunity you want to invest in, it’s time to reserve your spot in the deal. Usually, deals are filled on a first-come, first-served basis, so you’ll want to take the time to ask questions and do your research before a live deal opens up. Some of the deals I’ve invested in have been funded in 36 hours, so prepare to act quickly!

Often, investment opportunities can fill up within mere hours, which is why it’s important to have completed research, solidified your investment value, and have clear goals. That way, when the opportunity opens up, you can jump on it.

Typically, the first step is to make a soft reserve, which holds your spot while you take time to review the investment materials. The soft reserve does not lock you in the deal; it merely saves you a spot in the deal while giving you more time to review the fine details of the investment and conduct your own due diligence.

Step #4 – Review the PPM

Once you’ve decided to invest in a deal, the first official step is to review and sign the PPM (private placement memorandum).

This legal document provides in-depth details about the investment opportunity, the risks involved, and your role as an investor. Although reading legal jargon may be no fun, it’s very important you gain a full understanding of the risks, subscription agreement, and operating agreement pertaining to the investment.

As part of signing the PPM, you’ll also decide how you’ll hold your shares of the entity holding the asset and whether you want your distributions sent via check or direct deposit.

Step #5 – Send in Your Funds

Once you’ve completed the PPM, the final step is to send in your funds. Typically, you’ll find wiring instructions in the PPM document.

Pro tip: Before wiring your funds, double-check the wiring information, and let the deal sponsor know to expect it so they can be on the lookout.

How To Invest In A Multifamily Real Estate Syndication in Just 5 Easy Steps

Now that you’ve read through the steps and are able to see that investing in real estate syndications doesn’t require an advanced degree, I hope the process feels more clear to you, and hopefully, my explanation was able to alleviate the fears you had.  

In review, the five steps to invest in a real estate syndication are: 

1. Determine your investing goals
2. Find an investment opportunity that fits
3. Reserve your spot in the deal
4. Review the PPM (private placement memorandum)
5. Send in your funds

Real estate syndications are investments during which you’re committed for a period of 5 years on average. You are active in the beginning when you are choosing deals, reviewing investor information, reserving your spot, reading and signing the PPM, and sending in your investment capital. 

Then you sit back and wait until your distributions roll in!

Keep in mind I don’t offer any deal to you unless I’m investing my own cash in the deal alongside you. That means I’ve vetted the market, the syndication team, and the business plan so thoroughly that I believe this project will be a success. 

In each investment we make together, I am here for you every step of the way and will help you navigate the deal through the duration of our ownership of that asset. Investing shouldn’t be stressful – I’m here to make investing in multifamily real estate feel secure, bold, and exhilarating!