5 Things You Should Do Before Investing in Your First Real Estate Syndication

by | Jul 19, 2020 | Passive Investing, Real Estate Investing 101 | 0 comments

When you first begin to consider real estate syndications as an investment option, it can feel lonely, intimidating, or even like you’re going in blindfolded.

Personally, I had some anxiety about investing in a property I’d never seen, concern about how I’d get my money back, and doubt around the inability to log into an account and see my money.

These fears were addressed head-on through research and education. Every article I read and every conversation I had built my certainty until I began to feel confident toward taking the plunge.

If you’re considering your first syndication and feeling hesitant, I recommend doing your research, connecting with other investors, reading through previous deals, and taking your time.

1.  Do Your Research

The best way to build your investing confidence is through self-education and research. Listen to podcasts, read books, and find websites on real estate.

Books:

Rich Dad, Poor Dad, by Robert Kiyosaki (and associated books in this series)

Best Ever Apartment Syndication Book, by Joe Fairless and Theo Hicks

It’s a Whole New Business, by Gene Trowbridge

Principles of Real Estate Syndication, by Samuel Freshman

 

Podcasts:

BiggerPockets Podcast

Best Real Estate Investing Advice Ever Show, with Joe Fairless

The Real Estate Syndication Show, with Whitney Sewell

Investing for Good Podcast, with Annie Dickerson and Julie Lam

Active Duty Passive Income Podcast, with Mike Foster and Kevin Brenner

The Multifamily Investor Nation Podast, with Dan Handford

2.  Ask Questions

Relevant Facebook groups and forums like Bigger Pockets can help you learn what questions you should be asking.

It’s likely that other people have asked about your same concerns, and just by reading through the forum’s questions and answers, you’ll gain clarity.

Remember, there are no dumb questions, and you have the right to be diligent about gathering answers to your concerns.

3.  Connect with Other Investors

A successful investor needs a supportive community, and considering that syndications are group investments, you’ll want to get networking.

Any new investors will share similar anxieties, questions, confusion, and excitement. Experienced investors can provide invaluable first-hand accounts of their experience with various projects and sponsors.

Find other investors through online forums like Bigger Pockets, local networking events, or by asking sponsors if they’ll connect you to their current investors.

4.  Review Previous Deals

Finding comfort with financial projections, summary data, and investment lingo may feel overwhelming.

As you review more investment summaries, you’ll start to understand the flow of the deal packages, how each sponsor communicates, and exactly which investments interest you.

5.  Take Your Time

Each new investment opportunity fills up quickly. This can make new investors panic and start to believe they are missing the best deals. 

Remember, there will always be another opportunity. 

 Allow yourself time to complete the steps laid out here, so that when you make your syndication choice, you are confident about every step.

Considering Everything

If you take nothing else from this article, remember it’s completely normal to feel skeptical, anxious, and even timid when making your first syndication commitment.

The ability to take action is what separates the successful from those who give up.

Your first real estate syndication deal is a huge milestone in your investing journey, and, even though your head might be spinning now, this is a time to savor!

If you’re ready to take the next step, click here to join our BluSky Investor Club. We can help you learn more, and — when you’re ready — guide you through your first investment.

 

Related: Your First Real Estate Syndication: A Simple 5-Step Process