Next Level Assets syndicates real estate investments. In a syndication, investors pool their funds to acquire and operate a property, and share profits with the syndicator who finds, closes, and manages the property. This enables investors to diversify, reduce the risk & time-intensity of real estate investing, and participate in higher upside deals they could not find, vet, afford, or manage on their own. Typically, the investors receive a minimum yield before the syndicator receives a share of the profits – this gives the syndicator a greater incentive to ensure your investment success than perhaps any other professional in the real estate industry.
Some of syndication’s benefits include:
- Partner With An Expert On Same Side Of The Table
- Different than buying from someone on the other side
- Operator makes money only after investors do
- Operator has skin in the game and high success incentives
- Expanded Opportunity Universe
- Larger, higher-quality assets with scale efficiencies
Commercial, multifamily, resort, land – not just SFR - Easier to invest far from where you live
- Better financing options, 100% non-recourse to investors
- Diversification
- Smaller $/deal for each investor enables doing more deals
- Enables geographic, asset class, and economic driver diversification
- Requires a tiny fraction of the time to find, land, and run your own deal
- Experts Do All The Work
- Better network for better deal values: discounts, off-market
- Better management: top-notch team of professionals @ scale
- Less headaches: experts handle hard issues while you sleep
- All deal info and due diligence is spoon-fed to you, not hidden
- Risk Reduction
- Diversification among more asset classes/locations/deals
- More expertise & experts for due diligence ensures good buys
- More expertise & experts to manage prevents blow-ups
- Operator assumes all legal risks, not investors
- You can never be forced to lose more than your investment
- Unlike brokers, sellers, and others, syndicators are your partners
So, what are the downsides/risks?
- Less control over management and exit timing: do you trust your experts?
- Investors give up some of the profits: do the higher profits @ less risk offset it?
- Promoter risks: is operator honest, expert, committed, and incentivized?
- Project risks: is there a complete, detailed plan, risk assessment, and due dilly?
- Deal terms: is the syndicator taking big front fees, or putting you first?
If you hold multiple real estate investments in the same asset class/geography and need diversification, or if finding attractive opportunities takes too much time from your career, or if you are a first-time investor looking to score and learn at much less risk than taking that big leap yourself, you should strongly consider syndication as an attractive investment alternative.