Define Your Real Estate Syndication Strategy

Are you ready to take your real estate game to the next level? Look no further than developing a solid syndication strategy. Not only does it align with your overall business goals, but it also ensures that your team is on the same page and working towards a common vision.

When creating a strategy, it’s essential to define what you want your business to be so you can build systems and a team around that vision. The reason for defining a strategy is to have a clear goal to work towards. Think of it as a single focus. If you try to do too many things at once, like single family wholesaling, retail real estate, e-commerce, bitcoin, and multifamily, you’ll spread yourself too thin and have a hard time competing against those who are focused on one business model.

In my case, I specialize in finding value-add multifamily deals in underperforming properties in targeted secondary markets that can be repositioned and improved. Before the current multifamily boom, underperforming and distressed properties could be acquired at a good price because buyers with the expertise to finance, upgrade, operate, lease up and improve the deal.

When it comes to multifamily, there are various ways for any investor to go. It all comes down to defining your acquisition criteria. Perhaps you may want to do Class A properties in Class A locations. Or, you may want to go for those high cap rates in a Class D area. Every class of property has their pros and cons, but my team and I have made a decision to focus on value-add Class B & C properties, preferably in Class B areas. The reason we stick to B’s and C’s is because in good economic times and bad, they will always do well. The B’s and C’s are where the workforce that drives the entire economy live. When times are tough, some people may decide to cut back on the cars, vacations and upscale apartments, but no matter what, the workforce needs a place to live.

Our ideal properties are communities of 50 to 200 units in a Class C in a Class B area. We take a distressed value-add property and work to stabilize it, as long as it’s near public transportation, shopping, and employment. While it would be nice to find a property built after 1980 at a good price, our deals tend to be 1970’s builds. It’s not terrible if they have been maintained and updated. But even if they haven’t, we may be able to pick it up for an attractive price per sq-ft.

We prefer individually metered units and electric heat for each unit. On-site laundry is a must for these communities. If there isn’t for some reason, there would be a good opportunity to add after acquisition. Ultimately, we also target buildings that don’t have any type of rent restrictions or in areas where there is a great deal of government intervention.

As far as unit mix, it depends on the location. I stay away from 3 bedroom units as that means more people. When there are more people, it means more people beating up the unit, more utilities to pay for and more maintenance.

Don’t wait any longer, start defining your real estate syndication strategy today, and watch your business soar to new heights.

Be Bulletproof!