BiggerPockets Real Estate Podcast

Real Estate Syndications 101: What To Know BEFORE You Invest

Dec 25, 2024

Devon Kennard, a former pro football player turned syndication investor, shares his journey into the world of real estate syndications. He explains why he moved from single-family homes to passive investments and highlights key concepts like vetting operators and the benefits of syndications. Listeners learn about minimum investments, cash flow, potential profits, and red flags to watch out for. The conversation emphasizes the importance of communication with syndicators and transparency in building successful investment partnerships.

50:08

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Episode guests

Devon Kennard

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Episode notes

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Quick takeaways

Real estate syndications enable investors to pool resources for larger investments without direct management responsibilities, making it ideal for busy professionals.

A critical aspect of syndication investing involves thoroughly vetting general partners to assess their track records and communication styles before committing capital.

Investors should be aware of the liquidity risks associated with syndications, as capital is typically locked in for years relying on general partners' integrity.

Deep dives

Understanding Syndication Investing

Syndication investing is a strategy that allows investors to pool their resources to invest in properties or projects that may be too large or complex for them to handle individually. General partners are responsible for managing the deal and making operational decisions, while limited partners provide capital and typically have little control over day-to-day operations. This investment model allows individuals to access larger, potentially more lucrative opportunities in real estate without the burden of direct management. It can be particularly beneficial for busy professionals seeking passive income streams.

Intro

4min

Understanding Real Estate Syndications

11min

Navigating Real Estate Syndications

11min

Evaluating Track Records in Challenging Times

3min

Vetting Real Estate Syndication Operators

11min

Understanding Cash Flow and Red Flags in Real Estate Syndication

3min

Understanding Preferred Returns in Real Estate Syndications

6min

Want 100% passive income? As in no tenants, toilets, phone calls, or painting! You can get genuinely passive income through one type of investment—real estate syndications. Never heard of them before? You’re about to have your world flipped upside down because today, Jim Pfeifer, host of PassivePockets: The Passive Real Estate Investing Show, is on to walk you through real estate syndications, even if you’re a complete beginner!

Joining Jim is a long-time syndication investor and former professional football player (seriously!) Devon Kennard. Before syndications, Devon bought single-family homes during his NFL career, but as his time got increasingly limited, he needed a passive way to invest. The obvious choice? Real estate syndications!

Jim and Devon deliver a masterclass on syndication investing, showing you how much money you’ll need, how to vet a syndication deal BEFORE you invest, the profits you could make, and red flags to watch out for. If passive income is your goal, syndications are for you; here’s everything a beginner needs to know!

In This Episode We Cover:

Real estate syndications explained and who should (and shouldn’t) invest in them

The minimum investment amount for real estate syndications (lower than you’d think!)

How to vet a syndicator (general partner) BEFORE you invest in their deal

Why many real estate investors ditch rentals for the passivity of syndications

Preferred returns, equity payouts, and other ways a syndication will make you money

What Devon and Jim look for in a syndication before they invest any money

And So Much More!

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