Often times we have new investors come to us and they have a variety of questions. I created a blog for that but I think it might even be more meaningful if I go through some examples in the following videos and get you more clear on what we’re trying to do here.
What is Syndication?
So the first thing is, “What is syndication?” I think the most important thing to understand is there are a lot of investors out there exposed to the stock market and yet, they’re not exposed to enough real estate. Investing in real estate is a very nice way to diversify your portfolio and there are several reasons for that. I think the biggest reason is, they may be intimidated by the size of the asset or they may not have the skill, the time or the financial capability to take on an asset of that size.
So those are the three big things that we see with investors.
- Lack of time.
- Lack of capital.
- Lack of knowledge.
This is where syndication was created. Syndication is really the pooling of an investor’s assets. So if we pool an investors assets we are going to be able to buy larger investor assets like apartments, self-storage, and mobile home parks, which are some of the types of niches that we play in.
That opportunity allows you to be a passive investor. You invest the capital but you don’t have to worry about managing the property, finding the deal, worrying about the operations, or executing a business plan.
The roles and responsibilities in the syndication.
There are two major players, one is you the investor or the limited partner. You help us provide the capital to buy the asset, it Then in return, you expect a return of distributions from the cash flow of the property as well as at the end of a sale or profit from the sale.
On the other hand, you could have a general partner, do all the work. The general partner has all the knowledge, expertise and time, but hey need your capital to go out and buy these assets.
We typically do not buy assets that are new, instead, we prefer to buy assets that can be optimized. Assets that we can bring value too, usually in a couple of ways. One by renovating the opportunity or second by expanding it. We make the asset nicer for the current rent base or we improving the operation. Either of those two, which we typically do both, should optimize the asset over time. So think about the general partner as the active partner and the limited partner, and yourself as the passive partner.
In this video, we will explain to you how you can qualify for this type of investment. We will share with you the three conditions that you must meet in order to be considered as an investor.
We will also talk about what niches we currently focus on and why we like those type of investments.
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