If you’re ready to take your real estate investment career to the next level, being a real estate syndicator is may be a good next step. Launching a real estate syndication venture may be complex, but it is also rewarding.

To help you start on the right foot, follow the steps below, outlined by our leading syndication lawyers:

#1 – Choose a Specific Real Estate Asset Class

Whether it’s a residential apartment complexes, self-storage units, commercial office buildings, retail spaces, hospitality destinations, development projects, or industrial complexes, each comes with a unique set of challenges and opportunities.

By focusing on one property type, you can develop an expertise that will help you attract investors and effectively manage the property. Specializing allows you to become more knowledgeable and confident in your decisions, setting a strong foundation for your real estate syndication efforts.

#2 – Gain Specialized Real Estate Training

Once you’ve chosen your property type, it’s essential to acquire knowledge about buying, developing or managing, and then selling it. Getting these from industry experts will help you make informed decisions and boost your credibility with your potential investors. You can pursue online courses, attend workshops, or obtain industry certifications tailored to your specific asset. Investing in education upfront ensures you are well-prepared for the complexities of real estate syndication.

#3 – Establish Your Company Identity

Formally branding your company guarantees a strong impression in the real estate market. Start by choosing a name that aligns with your vision. Create professional business materials like cards, a logo, and a website to establish the brand name. As an additional service offering, our law firm offers clients syndication brand, company identity and website development services.

A cohesive identity helps you build a trustworthy image with potential investors. And, if you decide to have partners or open the company to equity investments, consult a real estate syndication attorney to draft an operating agreement and private placement memorandum, which will prevent legal mishaps later.

#4 – Develop a Syndication Business Strategy

A solid business model is your roadmap to success. Focus on the specific type of property you want to acquire and the reasons behind your choices. Define clear, measurable goals and set realistic timelines for achieving them. This will guide your actions and keep you aligned with your objectives.

Tailor your approach to suit your unique vision and balance it with the market’s dynamics. Then, you can be sure every decision you make supports your overall mission.

#5 – Educate Yourself About Real Estate Syndication

The field of real estate syndication is never static, so you need to keep up with its perpetually evolving landscape. Fortunately, digital technology allows you to do so with so much ease like never before. A wealth of resources are available with a few clicks of your mouse or swipes on your device’s screen. Research articles, read e-books, and listen to or watch webinars to stay informed about industry trends and best practices. Our real estate syndication law firm also offers our syndication clients books and over 200 training videos on how to manage and launch a real estate syndication.

Continuous learning not only sharpens your skills but also enhances your confidence when making critical decisions. The more you know, the better equipped you’ll be to navigate challenges and capitalize on opportunities, helping you stay ahead in this competitive market.

#6 – Build and Expand Your Investor Network

Actively seeking out and connecting with potential backers is a worthwhile exercise that pays off in substantial returns. Attend industry conferences, join real estate clubs, and engage on social media platforms dedicated to real estate investing. Our real estate syndication law firm also offers our syndication clients access to our investor network and helps our clients with capital raising efforts.

Personal interactions are invaluable, so make it a point to cultivate relationships through face-to-face meetings and follow-up communications. Building a diverse and robust database of investors will provide you with the relevant financial sources needed to fund your projects and ensure long-term success.

#7 – Evaluate Deals and Send Out Purchase Offers

Conduct detailed research and analysis on properties that align with your strategy and offer promising returns. Once you find suitable opportunities, submit Letters of Intent (LOIs) to express your interest formally. This step initiates negotiations and leads to securing properties that meet your investment criteria. Our commercial real estate syndication attorneys can help you structure effective LOIs that increase your chances of success for the acquisition of the property.

Expect to submit numerous offers before you are able to secure a viable one. Aim for a minimum of 10 per month and increase that goal to 100.

#8 – Secure a Contract for the Property

Once you’ve found a promising property to invest in for your syndication, your next step is to conduct preliminary due diligence to confirm the property’s condition and ensure it aligns with your syndication or fund’s investment criteria. This means inspecting the property, reviewing the last two years of financial records, and assessing any potential risks, including other due diligence items. Note that our commercial real estate attorneys have helped acquire properties as large as $250 million and can assist with helping you conduct due diligence on the property.

Once you’re satisfied and have a purchase agreement, you can prepare your Property Overview and share the information with investors. Clear contract details prevent misunderstandings and ensure a smooth transaction. Accurate and thorough documentation also makes the process easier for both you and your investors. The commercial real estate lawyers at our law firm will help you put these documents together as well.

#9 – Consult a Qualified and Competent Attorney

Not all real estate lawyers are capable of drafting accurate and comprehensive Real Estate Syndication Offering Documents. You should hire a real estate securities attorney, a legal professional who specializes in this field and has extensive experience with numerous real estate syndications. They will ensure all necessary legal aspects are covered, thus protecting your interests and those of your investors.

Have your syndication attorney review your Property Overview as well to ensure it complies with legal requirements and industry standards. They should also provide practical and legal advice on your company structure, selecting and adhering to an appropriate securities exemption, and approaching investors with an appealing profit-sharing mechanism.

Legal expertise is crucial in navigating the complexities of commercial real estate transactions, minimizing risks, and maintaining compliance, especially when syndicating, since you are also subject to SEC regulations. By involving a competent real estate syndication lawyer, you can focus on other aspects of your syndication process with confidence, knowing that the legal details are being handled correctly.

#10 – Complete Due Diligence and Arrange Financing

Finish the due diligence you started in Step 8. Verify the property’s value and condition and address any potential risks or concerns. Engage with a lender early in the process to explore financing options that align with your repayment capability. Prepare your investors for the upcoming funding requirements by communicating clearly and providing necessary documentation.

Coordinating these elements ensures you are financially and legally equipped to move forward. Balancing due diligence with securing financing ensures a seamless acquisition, helping you build trust with your investors and streamline the process.

Last Step: Raise Capital and Purchase the Property

Once your real estate securities attorney delivers the final offering documents, it’s time to focus on pooling funds and acquiring the property. Utilize the investor database you’ve built to secure the required capital efficiently. Stay organized and proactive throughout this phase to ensure all financial aspects are covered, from investor contributions to lender arrangements.

By staying on top of every detail, you’ll successfully complete this critical step and move forward with confidence in your real estate syndication journey.

Final Thoughts

Congratulations on completing your first real estate syndication! Remember, every step you’ve taken is a building block towards future success. While the initial process can be challenging, each experience will make subsequent projects easier to manage.

Keep refining your skills, stay adaptable, and continue expanding your knowledge base. With persistence and dedication, you’ll find that your efforts will pay off, leading you closer to your long-term goals. Your journey in real estate syndication is just beginning, and with each deal, you’ll grow more confident and proficient. Stay motivated, embrace the learning curve, and look forward to the rewarding path ahead.

Interested in becoming a real estate syndicator? Get the best legal advice from the foremost syndication law expert! Shams Merchant is the leading real estate private equity and syndication lawyer in the country, representing clients in award-winning real estate projects nationally. Shams specializes in real estate syndications, fund formations, securities law, and private placements for commercial property investments and development, and has been featured in publications like Law360, the Austin Business Journal, BisNow, and The Real Deal.

Contact Information

Shams@mwfirm.com | (832) 451-2594 | Schedule Meeting