Founders Grove Insights

What is real estate syndication?

written by Ryan Cox

What is real estate syndication?

Syndication has been one of the most common ways to invest in real estate for decades. In it, a sponsor finds a property and puts up the initial investment. Other investors then pool their funds to complete the investment, with the profit from the project divided up based on how much each investor had invested initially. Syndications typically operate as corporations, limited liability companies (“LLCs”), and general or limited partnerships. There are benefits for both the syndicator and the investor. The syndicator usually handles the details and paperwork—things like selecting the property, performing any due diligence, and completing any necessary closing processes—in exchange for greater compensation or a fee, generally paid yearly because the syndicator would also manage the property. For investors, real estate syndication affords the opportunity to own a percentage of a property—often a large one at that—generally without having to actually manage the property or project.

If you’re interested in taking the first step toward investing in real estate, or if you’d like to discuss adding another real estate investment to your portfolio, Founders Grove can help. Contact our team to set up a strategy session so we can discuss your needs in greater detail.