Setting the stage for successful real estate syndication involves a lot of moving parts.
From the outside looking in, it can appear like an intricate dance.
Each member of the team performs specific roles in the process. Some of the roles are behind the scenes, while others are more directly involved. When set in motion, all of these roles come together and generate equitable profits for all investors. One does not need to wear every hat to partake in the benefits of real estate syndication.
When it comes to executing a successful performance, several people are putting a lot of their time and expertise into crafting the production. From the director to the stage crew, each team member plays an important role in developing the overall experience. While the audience is a passive part of the production itself, they buy the tickets that fund the project. Their role is also an essential part of supporting the success of the production.
For real estate syndication, the role of each team member shares some common aspects with those found in a dance production. The real estate broker and lender provide the behind-the-scenes work necessary to get things going. The general partner directs the team and ensures that everything stays on track, while the property manager works in the trenches making sure the details fall into place. For passive investors, their responsibility rests solely on providing capital to the project, while the logistics of organizing and executing the project are handled by other key stakeholders.
The key performers in multifamily real estate syndication include:
- Real estate broker
- General partners
- Key principals
- Passive investors
- Property Manager
When all of these roles work together, you start to see a return on the investment and the intricate dance of real estate syndication comes to fruition.
Real Estate Broker
The real estate broker is responsible for finding potential properties that may yield a healthy cash flow for investors. Like a talent scout, they aren’t involved in the dance itself, but they see the potential in properties and are an essential part of getting the project off the ground.
They work closely with the general partner to procure the property and handle all aspects of the purchasing process, forming the connection between buyer and seller.
The lender provides the initial money to invest in the property. Like the real estate broker, they are an essential part of getting the ball rolling, but they are not involved in the syndication itself.
They both provide the behind-the-scenes work, giving the members of a real estate syndication a leg to stand on.
The general partner acts like a director. They work closely with the real estate broker and lender in locating and purchasing the investment property.
They are the ones who sign on the dotted line and oversee the day-to-day operations required to execute each part of the plan. The general partner oversees the property manager and ensures that everything runs on time.
To obtain a commercial loan, the sponsor must provide proof of personal liquidity. This gives the lender ease of mind knowing that the sponsor has enough private capital to keep the show going in case things go awry.
If the sponsor does not have the cash flow necessary to meet this need, one or more key principals may be brought into the fold to provide a more ample financial cushion.
Passive investors have the fun task of sitting back and watching it all unfold. They buy their ticket, contributing to the collective goal of creating something that benefits everyone and settle in to watch what their investment yields.
Without the added stress of having to pull off the entire production, passive investors can reap the benefits of the process without the headache.
Similar to how a tech crew orchestrates the lighting and sound needed to pull off a spectacular performance, the property manager is the one in the trenches making sure the project comes together.
They are responsible for ensuring that the business plan is being followed, and they execute renovation projects while overseeing any subcontractors.
The Benefits of Being a Passive Investor With Gimme Shelter
If you are lacking the background knowledge or savvy real estate connections, investing in multifamily real estate opportunities can seem intimidating. However, this doesn’t mean there aren’t wonderful opportunities out there for you.
Gimme Shelter acts as a liaison, connecting the key players in multifamily real estate syndications while providing passive investors with the resources and support to get the most out of their experience.
With the knowledge and tools we provide, our goal is to set you up for a successful experience. We will start with a discussion centered on your personal goals and use that to get you on a plan that suits your individual needs.
Want to Learn More About Becoming a Passive Investor?
Contact us today and learn more about investment opportunities with Gimme Shelter!