Over the past decade or so, investing in real estate syndications has grown in popularity among accredited investors who want access to larger projects than they’d otherwise have the capital for. What was once an investment vehicle mostly found by word of mouth is now becoming more prevalent amongst everyday investors who seek more creative ways to earn ROI on real estate. By working with the best syndicate sponsors, investors can now buy ownership interests in institutional-quality real estate investment properties across the country. So how can you get in on this rapidly growing sector of real estate investing? Read on to learn more about whether or not the real estate syndication fees make sense for becoming a sponsor yourself or if a syndication fund is the better choice.
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Real estate syndications are kind of like stocks. Much like buying stock in a single company, investors pool their capital to purchase a percentage of a single property. Another way investors get into syndication is through a syndication fund, much like a mutual fund. Real estate syndication funds enable investors to buy shares of multiple properties, distributing risk for greater stability, diversification, and quality of returns than a single property can deliver.
Both in syndication funds and single syndications, multiple investors combine their capital to buy, build, and sometimes even totally renovate commercial real estate. With syndication funds, multiple commercial properties are held in a portfolio that the syndicate investors buy a single position in.
Funds like the ones offered by Saint Investment Group provide more robust capital preservation and lower volatility than investing in a single property syndication. We’re seasoned experts at managing commercial real estate funds, freeing our investors’ time and energy. Our syndication real estate includes multiple types of commercial properties, including offices, retail space, industrial buildings, and student housing on college campuses.
If you’re considering starting your own real estate syndication, keep in mind the legal fees can rack up quickly. Typical attorney fees range from $450 to $1,000 per hour to set up a real estate syndication, with numerous bills of $20,000 or more being common. Remember, this is just the paperwork to form the syndication—there are still ongoing legal fees that syndication sponsors must shell out on a regular basis.
Transparency and reporting using online platforms have driven down the fees for buying into real estate syndication, along with enabling greater efficiency and scale. Leading platforms have highly optimized workflows, from property acquisition to collecting rents more efficiently.
Real estate syndication funds like those managed by Saint Investment Group provide more robust capital preservation and far less risk than investing in individual real estate syndications. Syndication funds like ours have seasoned sponsors who curate portfolios of properties, freeing up investor’s time and energy. Real estate syndication funds like ours hold properties such as offices, retail space, industrial buildings, and e-commerce fulfillment centers.
If you have extensive experience in commercial real estate investing, you may have what it takes to sponsor your own real estate syndication. Or, if you have some established business connections that can give you deep insight into a single syndication opportunity, that may be a profitable place to invest. But if you don’t have this type of experience, connections like these, or the time to start and manage an entire business, a real estate syndication fund can offer a much more secure way to invest.
The size and intricacy of the investment, the expertise and track record of the syndicator, and the particular conditions of the agreement between the syndicator and the investors are just a few of the variables that can affect the real estate syndication fees. The acquisition charge, which is usually paid at the time the property is bought, may vary depending on the price of the asset, the amount of due investigation needed, and the financing amount. The degree of services rendered, the size of the property, and the anticipated revenue from the property can all have an impact on the management fee, which is given to the syndicator for continuing administration of the property.
The degree of risk involved, the legal and governmental requirements related to the transaction, and the fees paid by other service providers like lawyers, accountants, and property managers are some additional variables that can affect real estate syndication costs. Investors should thoroughly examine any real estate syndication agreement's provisions and comprehend the elements that could affect the fees they are being charged. Along with the possible risks and benefits of the investment, they should also take the syndicator's expertise and track record into account.
Today, investors can enjoy real estate syndication deals that come with far more transparency than ever before, delivering robust reporting and easily accessed financial details to keep up with the performance metrics on their investment positions. Real estate syndication investors can now get a more intelligent, more financially stable, and more secure way to invest in real estate through funds.
Real estate syndication funds can invest in assets across the country, regardless of the investor’s own location, opening doors for investors to buy into booming real estate markets, and diversify like an expert. Funds make investment possible in certain areas of the country that are seeing multiple times the growth of other areas, providing significantly more security and yields than local syndication investments for some. For investors seeking to minimize their real estate risks, a high-quality real estate syndication fund offers an ideal solution.
So how do investors get into investing with a real estate syndication fund? First, they should do some due diligence research to find the syndication fund that matches their investment goals. Once they find a fund that aligns with their strategies, they simply deposit capital into the fund, and fill out the fund sponsor’s investment documents. After that, all they need to do is review the performance reports to ensure they’re getting the results they require and are expected.
For investors who want measurable results, real estate syndication funds make it extremely simple to invest in real estate syndication deals when compared with forming a syndication on their own. Not to mention avoiding the added risk of buying into a smaller private real estate syndication.
If you’re an accredited investor wanting to diversify your portfolio in a stable way that still delivers strong returns, commercial real estate syndication funds from Saint Investment Group are the solution. We provide you with the solid foundation in real estate syndication your capital deserves.
Call our seasoned syndication team today and learn how you can start investing in the commercial real estate market. Saint Investment Group is here to help you get into the real estate syndication that’s right for your portfolio.
Real estate syndicators typically charge two types of fees: upfront fees and ongoing fees. Upfront fees can include acquisition fees, due diligence fees, and legal fees. Ongoing fees can include asset management fees, property management fees, and performance-based fees.
The cost of real estate syndication fees can vary widely depending on the size and complexity of the investment, as well as the syndicator's business model. Upfront fees can range from 1-5% of the total investment amount, while ongoing fees can range from 1-2% of the property's gross income.
Some real estate syndication fees may be tax-deductible, such as legal and accounting fees, but it's important to consult with a tax professional for specific guidance.
Private equity companies and institutional investors may charge higher fees due to their bigger investment sizes and specialized knowledge, but real estate syndication costs can differ greatly between entities.
Investors should carefully review the syndication agreement and fee structure before investing, and compare fees with industry standards and the syndicator's track record. It's also important to understand the specific services and responsibilities covered by each fee.
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.
