10 Steps to Invest in a Real Estate Syndication (Step 3: Evaluate Potential Opportunities)

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After you sign up for an investor club list, when a deal is under contract and open to limited partners, you will likely get an email titled [NEW DEAL ALERT].

Most operators will schedule a follow up webinar or Q&A session so this is your first opportunity to review a general overview of the deal.

Here are some factors to consider:

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– Is it an area that has great population growth and job/economic diversity?

– What kind of neighborhood is it in?

– Is it close to any employers?

– Is it convenient to shopping, grocery, restaurants, entertainment, etc?

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– Is it a light value add?

– Is it a heavy lift?

– What’s the business plan?

– Are we looking to increase rents? If so, by how much and can the market support the increase?

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– What is the track record of the general partners?

– How many of their previous deals have gone full cycle & did they hit their projections?

– Why made them pursue this particular deal?

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– Is there a preferred return?

– When will distributions start & how often will they be received?

– What is the hold time for the project?

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– Is this deal open for both accredited and non-accredited investors?

– What are the minimum/maximum investment amounts?

– Are there different classes of investors with different return structures?

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– Is there an investor webinar?  

– When to sign the PPM?

– Where and when to wire funds?

– When is the closing?

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If not at that moment, when will it be issued?

These are some of the key things you’ll see on a new deal alert. It’s basically the first communication that goes out that there’s a deal on the horizon. Sometimes in the first email, you will get the opportunity to “soft reserve”. You aren’t committed to the deal at this point, but you are just saving your spot since some deals can fill up in just a few hours.

Be sure to check out the additional blogs in this series to see all 10 Steps to Invest in a Real Estate Syndication.  

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