In real estate, when the market is hot and values/cash flows are increasing, every mistake gets overlooked. When the market turns (and it always does), investors scrutinize everything.   However, in today’s world where anyone can produce media, it’s not just investors who scrutinize, it’s anon Twitter accounts, newsletters, niche media sites etc. In real estate today, there’s no bigger public punching bag than multifamily syndicators. I’m not going to say it’s undeserved. There are several high-profile examples of multifamily syndicators who got over their skis, charge exorbitant fees, have unfriendly waterfall structures, and who are poor operators. Some are even outright criminals! However, none of this is unique to syndication. It’s a biproduct of a highly fragmented, capital-intensive, and largely unregulated business. The process of raising capital directly from retail investors (syndicating) to buy real estate is common and really the only way for entrepreneurs to get started in the business. And it’s not just small firms, entrepreneurs, and crowdfunding sites who tap retail capital – institutions are raising capital directly from retail investors through vehicles such as non-traded REITs including some of the biggest names in the business (Blackstone, Starwood, and Hines).   The reality is that all […] The post The Truth about Real Estate’s Latest Dirt Word: “Syndication” first appeared on A Student of the Real Estate Game.

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