Real estate syndication is similar to mutual funds in the world of real estate investments. With an individual property investment, much like stock in a single company, the entire investment risk hinges on a single asset.
Like a mutual fund, real estate syndication funds enable investors to buy a portion of ownership in a corporation that holds multiple properties in a single investment entity, spreading risk around to increase stability and portfolio diversification, all while typically enjoying more stable returns. With real estate syndication funds, numerous investors pool their investment capital to buy, build, or even renovate multiple different real estate properties, often commercial, and often larger scale than any single individual could afford.
An often-cited example of property syndication is the investment group that bought the Empire State Building in the early 1960s. It took approximately 3,300 shares of ownership sold for $10,000 each to raise the $33 million the syndication needed to purchase the 102 stories of the highly desirable Manhattan property. This enabled access to a significantly larger opportunity for the investors than they would have had on their own, and they reaped massive rewards.
The Securities Act of 1933 afforded new ways for real estate investors to collaborate. Certain elements of the Act drove syndication real estate sponsors to create private networks of like-minded investors. These networks usually included individuals who were successful in their communities, along with highly-regarded, and often wealthy, professionals like doctors and lawyers. For a long time, real estate syndications were built largely through quality personal relationships in local communities.
Real estate syndication funds such as those from Saint Investment Group can provide more robust capital preservation and often far lower risk than investing in individual properties one at a time. Having seasoned investment experts curating the portfolio of properties within a real estate fund frees up your time and energy. Some examples of syndication real estate properties include offices, retail space, industrial buildings, and even student housing on college campuses.
Real estate syndication has recently earned the favor of accredited investors who have realized they can significantly improve their returns and diversification when investing with a skilled manager on more large scale real estate opportunities.
Access to best-in-class real estate syndication sponsors means it’s now possible for investors to invest in institutional-quality real estate assets across the country.
In 2012, a massive opportunity for accredited investors opened up with the passage of the JOBS Act. In this JOBS Act, the SEC was allowed to begin letting syndications engage in public solicitation with fewer restrictions, with the stipulation that each investor must be accredited. This change was the essential major step of the real estate crowdfunding industry, enabling easier access for investors on opportunities they’d otherwise never have access to.
As innovative new technologies connect people more effectively than ever before, real estate syndication investing methods have become more popular, allowing investors increased access to quality real estate asset investments. This, all while enjoying far more transparency than possible before, using robust reporting, and easy-to-access financials to keep a watchful eye on their investment positions. Real estate investors now have a more intelligent, more financially stable, and more secure option to invest in real estate.
A Real estate syndication fund also has the ability to invest in assets across the country, regardless of the investor’s own location. This opens doors for investors to live where they like, and not be forced to live in areas with particularly booming local real estate markets. While certain areas of the country are enjoying multiple times the growth of other areas, this means some markets are a significantly more secure and high-yielding investment than others. Investing in a high-quality real estate syndication fund provides far greater access for investors seeking to mitigate risks.
Typically investors are able to enjoy a role as mostly passive parties in the investment. How do investors get started with investing in a real estate syndication fund?
When it comes down to it, real estate syndication funds make it incredibly simple to invest in real estate syndication compared with forming your own syndication or becoming part of smaller private real estate options that typically involve more risk.
So what difference does online syndication make for investors? Online real estate syndication enables operators to instantly update reports with performance data that provide deep insight into every deal, as well as the key decisions affecting the fund.
The transparency and reporting made possible by online real estate syndication funds are beyond the old ways of syndication investment, providing more security and peace of mind while boosting efficiency and access to higher-yielding investments.
Are you an accredited investor who’s looking to diversify your investment portfolio in a stable way with strong returns? Commercial real estate syndication funds are an ideal option. Saint Investment Group can provide you with a solid foundation in real estate syndication. Call our expert investing team today and learn how you can seize the investing opportunities available in the commercial real estate market. Saint Investment Group is here to help you get started with real estate syndication that’s right for your portfolio.
A master in Investment, Marketing, and Capital Raising.
Nic has honed his focus on the Real Estate and debt markets with Saint Investment Group and pursues large-scale Distressed Asset purchases with his partners and syndications.