When it comes to finding the RIGHT team to help you make money, there is a lot to consider — especially with apartment syndication. Apartment syndication can make you big, big money and have a huge impact on your annual income… if you find the right team to help you along the way.
With the wrong apartment syndication team, though? 🤔🤔
Eek. Not so much.
Finding the right team who will help you make money — i.e., your apartment syndication BFFs — it’s most important to, well, find the RIGHT team. You know, the Mary Kate to your Ashley. The red velvet cake to your cream cheese frosting. The yin to your yang. The apartment syndication to your wallet. (LOL, get it?!)
And there are a few ways to recommend doing this to people who are ready to dive into real estate investing and apartment syndication waters. By vetting your deal sponsor the right way, you can stand to make a looooot of money… and essentially change your whole dang life. 💃
By working with apartment syndication and real estate investing team (hi, nice to meet ya — we’re Palmy ➕ Nancy Kitti 〰️ the Kitti Sisters) that gets you and wants you to succeed, you can multiply your wealth… and rapidly.
You ready⁉️ Let’s go…
Here’s how to vet your apartment syndication deal sponsor
Here’s the thing 〰️ apartment syndication is PASSIVE income, which is the way we like it. However, being involved in a passive income real estate investing stream means that you’re not going to be super involved in the day-to-day… and that means that you simply *have* to trust the apartment syndication sponsors you choose.
Basically, you’re entrusting a deal sponsor with your investment. Now, one of the great things about apartment syndication (and, really, real estate investing as a whole) is that you will have direct access to your deal sponsors as limited partners. But, that doesn’t change the fact that you still want to trust them and feel comfortable with them.
After all, you’re real estate investing — and that means that you’re investing a big amount of capital. 💰 Apartment syndication helps you leverage your portfolio even when you’re busy, and a great deal sponsor is going to make it worth your while.
Step one in finding the right team? Dig into their background, experience/track record, and references.
For instance, you’re going to want to look for deal sponsors that 〰️
A. Are passive investors themselves
B. Walk the walk AND talk the talk and
C. Have great references from their past investors.
At The Kitti Sisters, we personally have had ownership of over 3,400 apartment units, and we currently have deals in the full cycle and hold period (***giving our passive investor 45-50% annualized return ⚡). We know what we’re doing because we’ve done it, too — and that’s key in choosing an apartment syndication deal sponsor.
Step two in finding the right team? Make sure you understand their roles, their sponsor fees, and their overall alignment with investors.
First off, do the deal sponsors ALSO have skin in the game? How much are they investing? (We always invest our own capital in our deals, and you’ll want to look for someone who does the same.) Now, are their fees above industry average, or are they in line with what you’re looking for? What’s the acquisition fee? What roles will they play as investors and deal sponsors in the apartment syndication deal? What’s their investment strategy?
Do your due diligence here, and find a team with a great business plan and experience making money with a real estate asset. 🙌
Step three in finding the right team? Trust your gut and make sure they’re professional and communicative.
No matter how many real estate investments you may have made in your life, you can’t underscore the importance of communication from your deal sponsors. Make sure that the apartment syndication deal sponsors you’re choosing are proactive with their communication and transparent with what they’re doing.
And, more than anything, trust your gut. 😎😎 Your gut knows more than you think, and it’s something you definitely want to pay attention to when you’re diving into the real estate industry.
What you need to know about real estate syndication deal sponsors?
We get a lot of q’s around here about real estate syndication and apartment syndication (duh! We love it!), and here are a few of the ones we find ourselves answering a lot 〰️
How do I find sponsors for real estate syndication?
There are a bunch of places to look for syndication sponsors, and you’re already in a great one here with us! However, check out things like CrowdStreet, FundRise, and RealtyMogul. Plus, there’s always a huge benefit to meeting people in person. It helps.
What exactly *is* a syndication sponsor?
A syndication sponsor or a deal sponsor (or a general partner — truly, there are SO many terms for it) is going to be who manages the deal, procures the property, secures the investment, and manages the real estate deal. Basically, they’re the ones shouldering most of the responsibility.
What should I look for in a syndication deal?
So, this is a question that needs its own blog post (hold tight, you know we’ll write one!), because it’s a pretty multilayered question. However, there are a few things you should definitely pay attention to:
- First up, is it a 506(b) or a 506(c) offering? You’ll likely want to do a 506(b) offering at first and a 506(c) once you’re more experienced.
- Then, what’s the deal sponsor’s track record?
- What’s the monthly cash return? How much money can you expect to make?
- How are distribution payments made?
- What tax benefits are there?
- When are the reporting periods?
- What’s the exit plan?
- What do the voting rights look like?
- What sponsor fees should you expect to pay? How about an acquisition fee?
- How many real estate investors are going in on the deal?
- What kind of property is it? Apartment complex? Multi family apartment? Commercial real estate?
- How is the passive income coming in? (i.e., is it from apartment building fees, etc.)
Basically, there *is* a lot to real estate investing… but the right deal sponsor often means the right deal. 🙌
By doing your due diligence, you may just become the next apartment complex millionaire. Just sayin’.
At The Kitti Sisters, we’re proud to be an apartment syndication team that values our clients more than our bottom line. We think everyone can be a real estate investor, no matter who they are — and we’re here to help you boost your cash flow and find great apartment deals. 😘😘
Wondering how to vet a deal sponsor the right way?
Download our free checklist here, where we dive into what exactly you need to look for as a passive investor in apartment syndication.