Real Estate Syndication - The Art of Partnerin’

Everyone has a gift, talent or assets that are valued by others.
The art of profitable real estate syndication is in recognizing arbitrage. If you want to be the person who syndicates the deal then you have to be the one that sees the arbitrage. Arbitrage is the difference between the before-the-deal value and the after-the-deal value of an asset.
So your talent is in knowing that after an action has happened the asset in question will have a much greater value than it does right now.

Why be the syndicator?
Being the syndicator puts you in the polling position, so to speak, in that you are the one that writes the contracts both to get control of the asset and the contract to cause the change in the asset that increases its value. The reason that you can write yourself into the deal is because you can see it and others can not (or have not had the mind set to look for it). The increased value is what you get to share in by putting a syndicate together.

Doing a syndication usually involves three types of parties. There is the present asset holder. There is you, the one who’s partnerin’ skills are rewarded by the increased value of the asset. And then there is the contractor that is going to do the work that will cause the asset’s value to increase.

Some practical examples will help to illustrate how you can come in with none of your own money or credit and create wealth for everyone involved. This is a win, win, win situation. Because it is your reputation that will get you future deals, the only way to make a syndication happen is if everybody is profiting. That point can not be over emphasized.

Example 1: You’re going to take a parcel of real property and improve its value by improving its capacity to produce revenue. When its value has increased, it is then worth a lot more.
Process: You find a property owner that owns a prime piece of real estate. You secure an option from him to purchase or lease the property for a fixed cost or a percentage of the deal. You then find a developer or builder or just a home improvement company that wants to profit by putting his own plan forward to build up or improve the property. When the work is done it can support more financing or be sold for a greatly improved price. Everybody gets a piece of the profit. You came in with no money or credit but walked out with perhaps millions.

I have three deals right now I’m working on. One is vacant land where we are attempting to install senior housing. Another is a vacant building that we are going to convert and sell off the condos. The third is a constant process with houses that are not selling that can be improved upon and then sold for more. The syndication process for all of these involves multiple people with varied talents.

Real estate syndication is the process of creating value for others.

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