Pool your money with other investors to buy larger properties. Learn how syndications work, the risks, and how to evaluate a deal.
A real estate syndication is a partnership where a group of investors pool capital to acquire a property they couldn't afford individually. A sponsor (or general partner) finds the deal, manages it, and raises money from passive investors (limited partners). Crowdfunding platforms have made this accessible to smaller investors.
Finds the deal, puts together the financing, manages the property, and takes a cut of profits (e.g., 20% of cash flow and appreciation).
Provide most of the capital, have limited liability, and receive preferred returns and a share of profits. They are passive.
A minimum annual return (e.g., 8%) paid to LPs before the sponsor gets any profits. Often "non‑cumulative" or "cumulative".
Key metrics: Internal Rate of Return (time‑weighted) and Equity Multiple (total cash returned ÷ invested capital).
1. Sponsor finds a multifamily or commercial property needing capital.
2. Investors commit funds – minimums often $25k–$100k (crowdfunding lowers this to $1k–$10k).
3. Sponsor manages renovation, leasing, and operations.
4. After 3–7 years, property is sold or refinanced, and profits distributed according to the deal structure.
Typical split: 8% preferred return to LPs, then 70/30 or 80/20 split of remaining profits (LP/GP). Always read the Private Placement Memorandum (PPM).
See how different deal structures affect your potential returns.
This is a simplified model. Actual returns depend on timing, expenses, and sponsor performance. Always review the full offering documents.