As a commercial real estate investor, you may find properties you want to invest in but cannot afford to do so alone. You may also discover that you have other strengths in some areas but lack weaknesses, like possessing a lot of capital or bookkeeping. Commercial real estate syndication is investing in a property that would otherwise be out of reach in the commercial real estate world. Here is everything you should know about this form of syndication.
What Are The Roles Within Commercial Real Estate Syndication
Suppose you have the skills to obtain capital but not enough money to buy a commercial property. In that case, you can form a real estate syndication, a group of investors working together to make a building thrive while generating money. The syndicator is often referred to as the sponsor. This role is responsible for securing a deal using the investor’s capital. A syndicator should be skilled at establishing transactions, accounting, resolving unanticipated situations, and handling paperwork.
On the other hand, One or more investors may have the capital to purchase the property jointly. They will also give funds to assist in building renovation and property maintenance. The syndication is complete when all members agree to resell the property at a better price than what they purchased.
Use Structure To Become Organized
When starting a real estate syndication, hire a commercial real estate attorney to help set up the legal contract that will allow your team to work together in an organized manner. The syndication may also use a limited partnership or a limited liability company. As a result, the syndicator is known as the general partner or managing member, while the investors are known as limited partners or members.
How Will The Profits Be Split
There are numerous ways to split the profit, and the optimum solution will need negotiation between you and your team. The syndicator will most likely receive a fixed commission rate, while the rest is negotiable.
Trust the Professionals at Clagett Enterprises for Your Realty Needs
If you’re looking for an experienced property management company, the perfect realtor for your property, or a professional to assist you during your purchase of any home, you can rely on Clagett Enterprises. Clagett Enterprises is a full-service real estate company with almost 30 years of experience in the Frederick and Western Maryland area. For assistance with commercial sales, leasing, management, and development and consulting, contact us online or give us a call at 301-665-6009. To meet our team and see some of our beautiful homes, follow us on Facebook and Linkedin.