Real Estate as an investment vehicle is lucrative and, well, kind of intimidating. If not intimidating, perhaps it’s confusing? Foggy? Maybe all of the above?
We’ve personally experienced these types of hesitations around putting our money into physical assets that hinder liquidity, how we’d get our money back, and realistic ability to generate the returns in which we projected.
How did we handle these hesitations? Well, we jumped right in! Sink or swim approach. Bought one, then another, then another. Risky for us? Sure, just like anything. Rewarding? YES!
Investing in Real Estate through a syndication is slightly different. While the deal sponsors will always see the property in-person, more often than not, investors won’t. Sponsors will operate the property handling all tenant and maintenance related tasks, while investors never have to worry about that. What else is different? Nothing really.
But for those new to commercial real estate investing, or perhaps just unfamiliar with the syndication process, we understand there will always be hesitations before jumping into your first deal. So, how do you handle these hesitations? Head-on research. Articles, podcasts or conversations with other investors are all easy ways to build certainty which we highly encourage! Read on for 6 practical ways you can learn and prepare for your first deal.
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.
(1) Rich Dad, Poor Dad by Robert Kiyosaki
(2) It’s a Whole New Business by Gene Trowbridge
(3) Principles of Real Estate Syndication by Samuel Freshman
(1) BiggerPockets Podcast
(2) Best Real Estate Investing Advice Ever with Joe Fairless
(3) The Real Wealth Show with Kathy Fettke
(1) Relevant Facebook groups and forums like BiggerPockets can help you learn what questions you should be asking.
(2) 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.
(3) Remember, no such thing as dumb questions!
Connect with Other Investors
(1) A successful investor needs a supportive community, and considering that syndication is a group investment, you’ll want to get networking.
(2) Any new investors will share similar anxieties, questions, confusion, and excitement. Experienced investors can provide invaluable firsthand accounts of their experience with various projects and sponsors.
(3) Find other investors through online forums like BiggerPockets, local networking events, or by asking sponsors if they’ll connect you to their current investors.
Review Previous Deals
Any new investment deals will come with financial projections, summary data, and investment language that may be unfamiliar. The more you prepare, the better you will understand how deal packages typically flow, how each sponsor communicates and exactly which investments interest you.
Take Your Time
Each new investment opportunity fills up quickly. This can make new investors anxious to get hold of a deal. However, there will always be another opportunity. Give yourself some time to go through the above steps and familiarize yourself with the syndication process. If you allow yourself this, you will be more confident in your first syndication.
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.
We hope this helps! As always, don’t hesitate to reach out to either of us if you have any questions, concerns or want to learn more. We’re always here to help whether you decide to invest with us or not!