What is a Real Estate Syndicate?

As the marketer for EstateSyndicate.com, the largest real estate syndicate in the Midwest, I have seen many definitions of what syndication is, of what a syndicate is and what syndicators are but none have tied it all together in a short succinct explanation. So here you go.
A real estate syndicate is a group of people that have combined their assets for a common purpose.
Next we have to talk about what constitutes an asset.  There are both monetary and human capital assets.  So let’s put together a hypothetical syndicate as an example.
In order to get deals done on a more massive scale we need a number of types of human capital. Here’s a list:

• Real Estate Professional – this is the person who has expertise in transactions. He or she understands how to put deals together.  This real estate professional should know about foreclosure deals, short sales, types of deeds and financing options, trusts, how to flip contracts, how to set up a REIT or put together an LLC for real estate investing, options and how to do rent to own transactions. This is more than a realtor because this person should have in-the-trenches experience in doing deals not just selling real estate.
• Money Supplier – This could be a mortgage broker or a hard money lender or a person that can put together a supply of money to advance a transaction.  This person should have knowledge of underwriting, putting together loan documents, lender application forms and processes and have a ready supply of money that is available in two or three days to do cash deals. A bank is not a money supplier – they take way too long.
• Marketer – This person has not only unique skills in promotion but also has the pieces in place in order to generate lists of buyers, sellers, investors, and money lenders.  If your syndicate has a decent marketer in place your partnership will inevitably be successful because you will have a constant flow of buyers, sellers, and money lenders entering your fold. Most real estate professionals don’t know how to market and that’s why they are not making much money.  Realtors are notorious for “no marketing knowledge” and that’s why houses are sitting on the market so long. (It has nothing to do with market conditions)
• Lawyer – this person is very useful on an “as needed” basis.  Occasionally your syndicate will need unique contracts, partnership documents and legal advice about setting up investment entities.  Your investment group should have your own “boiler-plate” docs ready to go so a lawyer isn’t needed except on demand.  You should have a pre-arranged relationship with this professional so they know they are your “go to” guy and treat you accordingly.
• Accountant – The real goal of any business is not the money coming in the door but rather how much of it you get to keep.  Taxation and entity structure plays a big role in the final outcome so an accountant can be an invaluable asset in the mix. Find somebody that knows real estate taxation and entity structuring for tax advantages for your greatest success.
• Closer – If you plan on doing regular closings a closer can be invaluable to get all the i’s dotted and the t’s crossed and knows the laws and requirements to complete lending and title documents and most importantly how to legally distribute the money..

In this mix of human capital the real estate professional is the person most likely to be the syndicator because he’s the one putting the deals together most often.
There you have it – a full blown real estate syndicate.

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