Multifamily syndications are becoming even more attractive to sophisticated investors. What should investors be looking for in these investment opportunities?

Syndicated multifamily investment property opportunities can be very savvy moves, especially for high income earning professionals, retirees, corporate investors, family offices and funds. Of course, how great the rewards are can vary depending on which syndicators investors choose to work with. What should be looked at when selecting one?

Investment Model

What are the syndicator’s investment strategy and model? What types of assets are they acquiring? Are they apartment buildings or mixed use? Are they Class A, B, C or D properties? Is this a cash flow play or a shorter term renovate and flip play? What are the tax saving options involved? What it the anticipated holding timeline? Does this all align with your investment goals?

The Operators & Sponsors

Who is promoting the opportunity? Who will be handling the daily asset management and decisions? What is their track record of experience and reputation? How does their level of risk tolerance compare to yours? Are they conservative and look for opportunities with outsized rewards and collateral, or are they pushing their limits?

Due Diligence

What due diligence is the syndicator performing on properties? Are they conducting full inspections and obtaining enough contractor quotes in advance? Or are they winging it?

Leverage

Will you be investing alongside other sophisticated investors with all equity? Will the sponsor be co-investing along with you in the property? Or will there be some institutional leverage used to complement your capital?

Costs & Returns

A good asset manager will more than earn their compensation. It’s good to know how they earn. Are their earnings tied to your portfolio and asset performance?  Where is your payday in the larger picture of things?

Summary

This is an important time for many investors to allocate more capital to syndicated multifamily investors. Of course, not all opportunities are equal. Make sure these factors and questions are on your checklist when evaluating and comparing your options.

ABOUT THE AUTHOR

Bill Zahller is the President of Park Capital Properties and resides in Asheville, NC. As a Multifamily Real Estate Investor and Syndicator, he founded Park Capital Properties in 2016 after 14 years involvement in real estate investment. He works with accredited investors and professionals who are interested in real estate investment, diversification, and financial freedom.

Bill has been flying since high school. His father was a Naval Aviator and Captain for TWA. Bill has been flying professionally for over 25 years, 23 of those at his current company. He has accumulated over 12,000 hours and 7 Jet type ratings. He has also held Instructor, IOE Instructor and NRFO pilot positions with a large fractional flight company. He is currently flying the Global 6000 in a long range mission capacity. This keeps it interesting – one week its Beijing or Sydney; the next Rio or Rome.

Bill is also the founder of the Asheville Multifamily Investor Club. Visit www.ParkCapitalProperties.com for more information.