Realty411 Magazine Featuring Lori Greymont | Page 52

Dictionary.com: Syndicate:
“[n. sin-di-kit; v. sin-di-keyt]
A group of individuals or organizations
combined or making a joint effort to
undertake some specific duty or carry
out specific transactions or negotia-
tions”.
Recently to my surprise one of my ra-
dio listeners asked me if syndications
were legal. I said that the way I do
it and most syndicators as well, it in-
deed is. In fact, a high percentage of
large real estate investment ventures
are syndications.
The term syndication has no legal
significance. The responsibility, obliga-
tion and relationship of the syndicator
to the investment group and the investors to each
other are determined by the form of organization.
Anyone or any entity can syndicate a deal, and
yes, so can gangsters, which is apparently the basis
of my listener’s concern. Yes, you do need to be
careful with whom you team and invest with.
a home loan look like a visa charge at the convenience
store.
And that is just the starting point. Once the property is
purchased, optimum professional property management,
both the strategic and the day-to day-operations, is critical
to maximum the returns for the investors. This can make
or break the projections.
When it is time to sell, the syndicator has
by Tom Wilson
Tom Wilson is a 37-year real estate don’t
veteran
who
excellent knowledge of the market in that region
recommend being a
estate investor…un-
has executed over $100M and 2,000 real units
of real
for that type of product and can maximize the
less you have a well-de-
estate investments. Wilson is also a weekly
host quantitative
of the
sell price and terms. Having a syndicator who
fined strategy,
goals
and are dedicated
to am
go by
Real
Estate
360
Radio
program
on
KDOW
1220
can synergize all of these parts increases the
the numbers and not by unsup-
every Wednesday at 2 pm. Listen to ported
his advice
podcasts
or emotions. on
return/risk ratio.
My engineering training and
Why Dallas / Ft. W
of the Best Metros
I
iTunes or his website:
REAL ESTATE SYNDICATION
ORGANIZATIONAL FORMS
Selecting the form of organization involves practical as
well as legal and tax considerations. Each of the avail-
able entities has advantages and disadvantages. The LLC
and LP are the most commonly utilized entities used for
syndications today.
SYNDICATION BY THE NUMBERS
• Real Estate syndication statistics in US
50,000 syndication investors per year
• $2,300,000 average syndication
value
• 5-9% typical preferred returns
• 3-10% property management
operating fees
• 1-10 years range of ownership
Realty411Guide.com

Are there
have weathere
turn well, are
many of the
above, and ha
tively calmer
ing these past
years?
Indeed, m
http://tomwilsonproperties.com
30 years of experience manag-
in more than
Tom Wilson
ing high tech profit centers in
transactions o
Silicon Valley taught me how to analyze for has revealed that Dallas / Fort
the best return on investment in any mar- of the best real estate investm
ket.
in the United States; that is
Today, the principles of analysis remain it for most of my personal p
the same. Anyone can do it, however, one term holdings.
needs to be very disciplined and educated The strengths of Dallas / Ft.
about the submarkets and products, or ride •Business and financial ca
the coattails of someone who is.
South.
The primary parameters for selecting the •The highest rent per invested
best investment markets are:
major economic center in the U
•Rent to purchase price ratio
and therefore, the highest cash
•Population growth and inward migration
•One of the lowest risk and s
•Employment growth and business climate
in the United States for real e
•Housing affordability
•Lowest decline housing pric
•Location
the only US single digit depr
•Cost of living
ro
•Rental market
•Fourth largest and one of the
•Current and projected market conditions
ing MSAs (Metropolitan Sta
Now that speculative investing for fast in the United States. Project
profit has gone the way of the last super- population to 12 million by 20
model, the wise investor is focused on cash •Broad-based economy that ha
flowing assets and safe harbors.
the employment rate growth o
States during the past decade
•
b
m
U
•
c
•
M
p
q
c
e
•
i
U
t
ADVANTAGES OF SYNDICATIONS
* Enables an investor to participate in
larger and higher quality investments.
* Utilizes the syndicator’s ability to find
the best products at the best value.
* Utilizes the syndicator’s ability to get the
best loans including non-recourse.
* Reduces the investor’s risk.
* Distributes the investment risk.
* Utilizes the syndicate’s ability and
experience to manage the acquisition
and product throughout the investment
hold period.
* Liability limited to the investors
contribution.
* Easier for an investor to get into a
non-local market. Las Vegas Worst
PAGE 52 • 2015

Realty411Guide.com
Dallas Best
reWEALTHmag.com
PAGE 28 • 2012