Real Estate Syndication
As a real estate investor, you may already have your eye on a property that best suits you but you may not have the capital, which is very important as the capital is what enables you to invest in the said property.
Bret Sanya
Here is where real estate syndication comes in. So what exactly is real estate syndication? Real estate syndication is where each investor brings in their funds in order to buy a larger and stable asset than one would have done on their own.
The next question one would ask is, why should I opt for real estate syndication? One of the pros of this can easily be captured in the definition but just to put it into perspective for better understanding.
Real estate syndication involves pulling funds with other investors therefore, you will have a bigger buying power than when you buy a property alone, for example, imagine you want to buy a commercial property in Westlands and you have Ksh. 500,000 and you have an easier option of teaming up with 12 different people with Ksh, 500,000 the latter option increases your buying power.
Through real estate syndication, one is able to embark on larger projects which in turn means better stability. When you decide to put your money in a bungalow which is occupied by a family then, of course, you will make a profit through the rent they pay but once they move out you will have 100% vacancy and you incur losses, When you decide to invest in commercial spaces, apartment complex, etc. you may not incur loses this is because you will be having other tenants who will provide a similar return on investment.
In real estate syndication, you can either be one of two parties, the deal sponsor or the investor, the deal sponsor is the active individual who is responsible for finding investment opportunities, raising the capital, handling the tax returns, and such. While the investor is only supposed to place money on the investment.
Just like any other investment plan real estate syndication has its own downside, some of them include, the capital call is overrun by the construction call, project delays, the general partner would decide not to complete the project this are just some of the disadvantages of real estate syndication which someone may face.
Real estate syndication is wide and it entails a lot but this gives anyone who had no idea of what it is a bearing on where to start and where to go.
-Edited by Emomeri Maryanne
