Breaking Down Apartment Syndication

The future of real estate investing lies in real estate syndication. To better understand real estate syndication, we simplify the understanding of the massive benefits that come with this emerging trend of real estate investments and what are the key components of multifamily real estate.

What is apartment syndication?

In real estate syndication is when a group of individuals, investors or companies come together to pool their resources to achieve a goal that would not be possible on one is own. Apartment syndication then is when that collective unit come together to purchase an apartment complex with the goal of making a profit.

Types of apartment syndication?

When it comes to apartment syndication properties, one can choose from new developments to unstabilized properties.

Why go with apartment syndication?

When it comes to real estate syndication, it brings together both investors and general partners. Through this collaboration, both parties can benefit from the profits of 50/50 or 70/30 between investors and general partners.

Where does the money come from?

When it comes to real estate syndication, one of the necessities is money. Without the money investors and partners cannot begin the process of benefitting. In real estate syndication, there are three parties to consider.

The parties that are essential:

Sponsors — This party is essential when it comes to apartment syndication as they provide the most collateral. Sponsors receive revenue either from an acquisition or management fee.

Limited Partners — This party will receive a majority of profits from operations and the sale of the assets and they will receive a percentage from the ownership. Depending on the limited partner dynamic and breakdown, it can be anywhere from 50/50 to 80/20 split.

Property Management — This party is essential in the management of multi-unit families. They take care of the properties, from maintenance to ensuring the rental fees are paid. Though the management fee is typically in the single-digits, when there are multiple properties can add up.

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