Benefits Of Investing In A Multi-Family Syndication

Yannik Cudjoe-Virgil

Multi-family real estate is one of the most compelling asset classes in commercial real estate, and has consistently delivered a track record of high resiliency and returns during the ups and downs of the economy. You may be interested in investing in this asset class by partnering with experienced sponsors. Here are some key benefits to investing in a syndication deal.



1) Management - Avoid the day to day operations of managing tenants and toilets. Managing large assets can be a full-time job and requires high-level systems and processes in order to both operate efficiently and execute the business plan.

2) Time - Spend your time doing the things enjoy, and with the family you love, while the sponsor does all the leg work to execute the business plan. You may want to enjoy the benefits of real estate in your portfolio but you may not have the desire to chase sellers for opportunities, put deals together, manage contractors, communicate with property managers, and other essential tasks.


3) Accessibility To Opportunities and Qualified Deal Flow - More accessibility to investment opportunities outside of your market. If you live in a market like San Francisco or New York, with a high barrier to entry that makes it difficult to invest, you're able to invest in other areas with your operating partner. Also, you're able to enjoy the benefits of qualified deal flow when you're unable to find a good deal yourself. Syndications help eliminate this frustration.


4) Asset Diversification - This is one of most important principles of investing. Placing capital into one asset class can crease some risk to your portfolio; however, investing in multiple areas and multiple properties reduces the risk of failure affecting all of your investment capital.


5) Liability - As a limited partner in the LLC, your liability is limited to the amount you've invested - compared to an asset that you own 100%.


6) Bigger Deals - Either you're going to dedicate your own cash and resources to do bigger deals - which can be difficult, or you can partner with an operator who syndicates capital to enjoy the benefits of larger assets.


7) Experienced and Sophisticated Sponsors - Syndications are a highly-complexed investment strategies that the average real estate investor will not likely employ in their investing career. Syndications for large apartment properties require a level of sophistication and intelligence from operators - given the moving parts of a transaction from acquisition to close, and the level of expertise needed to execute for investors. When you invest with a sponsor, they are likely highly educated professionals executing data-driven investment strategies. In this case, you're leveraging the sponsor's knowledge, experience, balance sheet, management team, market research and other resources - which brings an incredible amount of value to investors.

As you can see there are a multitude of benefits to investing in a multi-family syndication. As always, choose the right sponsor, with the right team, who you can trust to execute and deliver.