Photo by Yan Krukov from Pexels
The Syndicator ’ s “ Flip ”
Enhanced Diligence requires that you research the property ’ s history . To do this , contact the Customer Service department at a major title company at the location of the property . Ask for “ a Property Profile ” that has transactions going back 10 years . Usually , this will be provided at no cost . Look it over to see if the promoter already owns the property that they are trying to syndicate . If so , they are trying to do “ a Syndicator ’ s Flip ” as their exit strategy from ownership of the property . Usually , they will build in a nice profit for themselves upfront such that the investors pay retail or above . Then , since the promoter has their profit , they usually go on to neglect the syndication . Is this common ? Not so much . But it happens , and you need to guard against it . Is it legal ? Good question ! Don ’ t bother to find out !
Conclusion
Many syndication investors take the easy path by reading the promoter ’ s Offering Circular , maybe seeking an advisor ’ s opinion , then wiring funds or writing a check . This is nowhere near enough ! They need to go beyond even “ due diligence ” to Enhanced Diligence . This article equips investors to do that .
Good Luck .
Enhanced Diligence requires that you research the property ’ s history . To do this , contact the Customer Service department at a major title company at the location of the property .
MEET BRUCE KELLOGG
Bruce Kellogg has been a Realtor ® and investor for 40 years . He has transacted about 800 properties in 12 California counties . These include 14 units , 5 + apartments , offices , mixeduse buildings , land , lots , mobile homes , cabins , and churches .
Mr . Kellogg is a contributor and copy editor for two national real estate wealthbuilding magazines : Realty411 , and REI Wealth Monthly . He is a recipient of an Albert Nelson Marquis Lifetime Achievement Award , listed in Who ’ s Who in America – 2019 .
He is available for consulting with syndication , turnkey , jointventure , and other property purchasers and note investors nationally , and other consulting assignments . Reach him at
brucekellogg10 @ gmail . com , or ( 408 ) 4890131 .
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