Real Estate Syndication Basics Real estate syndication is a transaction between a Sponsor and a group of Investors. As the manager and operator of the deal, the Sponsor invests the sweat equity. This includes scouting out the property and raising funds.How does the sponsor make money from real estate syndication?
Property appreciation and rental income are the two main ways the Sponsor and the Limited Partners make money from real estate syndication. Rental income from a syndicated property is distributed to investors from the Sponsor. This typically occurs on a monthly or quarterly basis according to preset terms.What is sysyndication?
Syndications are usually structured as a Limited Liability Company or a Limited Partnership. The Sponsor participates as the General Partner or Manager. And the investors participate as limited partners or passive members. Further, the LLC Operating Agreement or LP Partnership Agreement are vital documents.What is a syndicate offering?
A syndicate offering is a means of bringing a new security to the market. The lead underwriter will put together a "syndicate" of several investment banking companies and broker-dealers to jointly underwrite and distribute the new offering to the investing public.