When Jake & I began our investing career, we only knew of one way to buy real estate. Buy it by yourself! We had never heard of syndication, and to be fair, over ten years ago, the economy and the real estate market were a bit different. Those were the days of 1% GDP growth, low rents, a difficult environment to raise capital for investments, and deals that languished on LoopNet for months and months. Oh, do I miss those days.
Seriously though, the strategy of syndication received a huge jolt from the JOBS Act (Jumpstart Our Business Startup Act) of 2012. The intention of this act was to allow funding of businesses in the U.S. by easing some of the security’s regulations. This is the impact of the JOBS Act from Investopedia:
It lowers reporting and disclosure requirements for companies with less than $1 billion in revenue and allows the advertising of securities offerings. It also allows greater access to crowdfunding and greatly expands the number of companies that can offer stock without going through SEC registration.
You can see the effect it has had on syndication, and multifamily in general. An explosion has taken place over the past decade, which has allowed the average investor to partake in the gains in multifamily.
Before we go any further, let me define to you what a syndication is. Let me turn to Investopedia again, as they have the most succinct and accurate definition:
A syndicate is a temporary alliance of businesses that joins together to manage a large transaction, which would be difficult, or impossible, to effect individually. Syndication makes it easy for companies to pool their resources and share risks.
In effect, you are pooling your money and your investor’s money to be able to invest in bigger deals than they could afford on their own. It is a fantastic way for an investor with limited capital to invest in larger deals.
Check out the full video to learn more.
Read the detailed article authored by Gino Barbaro ‘What Is A Multifamily Syndication’: https://jakeandgino.com/what-is-multifamily-real-estate-syndication/
Get more resources on apartment investing: https://jakeandgino.com/education/
Sign up for free training: https://jakeandgino.mykajabi.com/freetraining
#multifamilysyndication #realestateeducation #apartmentinvesting