Making Money in Hard Times Through Syndicate Deals

It’s a fairly well acknowledged fact that when the going is good just about anyone can make money. This is as true of real estate as any other market and when the going is good there everyone tends to think the same way: they think of the rewards more than the risks and want to get in there and make as much money as possible.

In a tough market however everyone wants to hedge their bets and spread the risk while limiting their exposure and it is here that syndicate deals are born. As a real estate expert active in real estate for a long time and with a reputation for delivering value and closing deals I get asked all the time to front different syndicates.

I am in the envied position of being able to pick and choose who I do business with and which deals I decide to take on which means that I am also in the position of picking those which give me the best return for my time and my expertise. But that has not always been the case and I had to work my way to this position through sheer hard work and application of what I call my ‘rules of picking a good syndicate deal’.

In brief, a syndicate deal is when you close real estate deals using other people’s money. This means you are acting as a front man using your skills and knowledge to work real estate investments while behind you there is a syndicate of people who have put in money to a varying degree and who will get a proportionate percentage of the profits. You will also benefit from the deal by taking an agreed slice of the profits as you will be instrumental in making the deal happen in the first place.

As you realise the moment a market gets tough real estate investors and those who want to invest in real estate without being real estate investors per se try to limit their exposure by spreading their money in as many deals as possible. This means they tend to go for syndicated deals which spread their money and increase their chances of making a profit while reducing the risk of losing everything in just one deal going bad.

From a real estate investor’s point of view a syndicated deal in tough times makes perfect sense as you tend to use zero of your money and simply invest your time, reputation and expertise. This means that you can continue to make money even when the real estate market is going through the doldrums which is what being a professional real estate investor is all about. n