Real Estate Syndication VS Real Estate Fund – Which Is Better? (Real estate syndication company )
So you have two people, one who syndicates real estate and creates a real estate syndication and they manage to raise money and they talk about how they manage to raise millions and, you know, get a good return for their investors. You have another that happens to create a real estate private equity fund, and he gets to raise more money, he has more flexibility and he has a bigger track record and reputation. What really is the key little known difference that separates these two? Well, it’s when the syndicator knows, when the syndicator knows, when the syndicate and the private equity fund manager knows when they launched his private equity fund. The main difference that everybody gets wrong between the real estate syndication and the private equity fund, one little known tip is really the status and the brand and the reputation around doing a private equity fund syndications. You know, sometimes I guess the main difference is really when you’re syndicating real estate, you’re focusing on one assets, right? Like one piece of property or one piece of land or whatever, which is good in a sense. But sometimes when people raise money for a syndication, they sometimes they look. There are different ways of doing it. There are some ways that are quote unquote, more beginner and more quote unquote, low status. And then there are some ways that are really, you know, experts and really, you know, like professional. (real estate syndication company)
And when you’re looking to raise millions of dollars from investors, you have to do things in the professional way. If you want to get the track record and respect that you want. So the way that people do the real estate syndications is let’s say that you’re working on acquiring one piece of land. And let’s say that that building behind me, for example, you know, what people would do that would create, I guess the best way that raises a common, for example, in our members and people that work with investment banks and so on, The the best way that we know and how people create these real estate syndications is to create it as a limited partnership and sell the units of the limited partnership as a private placement. If this is if you’re working on raising capital for a down payment, let’s say you want to buy a $5 million deal and you don’t have the 25%, you know, the 1.25, you know, to put into the deal, you know, what some people would do? They would create a limited partnership. Right? A limited partnership just to sell those sell units into that down payments. They probably don’t put like 10% of that 1.25% to show that they have skin in the game and then they’ll raise money via selling, you know, the other 90% of the units so that they can buy that down payment. (real estate syndication company)
And so like, let’s say the name of the apartment is one, two, three fake street. They would raise capital to buy one, two, three, fake street. And then that’s pretty much how it goes. But there are other ways of doing syndications where people just create an incorporation and then they look for business partners to fill in that, you know, to be full time business units in that corporation. And people do this all the time and the heck knows it and everything. The only thing is that, yeah, well, it’s quick and dirty. You know, it can kind of limit you to a low status kind of way of doing it. So the second way is the private equity fund and the thing that prevents people from hitting you, going through the private equity fund route is track record. Because if somebody just invests in real estate directly, why would an investor trust them to manage their money and invest it in multiple deals where the investor could just choose to do one deal at a time? So that’s the number one objection that people get, and it has to do with track record. That’s why there are two groups of people who we work with at raises dot com, those who have worked on multiple real estate syndications and they’re looking to set up a private equity fund because they have the highest levels of success to actually get funding for their private equity fund. (real estate syndication company)
And then those who haven’t done any prior syndications or private equity deals and are looking to do their first. So if you were to work with people to do that, then you have you have a bearing on which ones to do. And ultimately it depends on how experience you and your management team is, whether you’re looking to acquire one deal or multiple, and whether you’re willing to go through the private placement routes for your private equity deal. Jvs and all this can work and create an incorporation and doing all this stuff can work. But long term, I mean, if you’re looking to raise like tens of millions of dollars or even hundreds of millions of dollars, private placements is usually the way to go and working with or working with institutional investors. And so with this, I hope this gives you some clarity on which path you would take, whether you be the, you know, the syndicator or whether you be the private equity fund manager for real estate. And if you need help and actually getting this done and actually building this, just make sure that you head to. (real estate syndication company)