Beginner Series – What is Syndication?

Welcome to the second in our series aimed at breaking down complex investment concepts for beginners. Iโ€™m Victor Menasce, your guide into the world of real estate investing. We are tapping into our Beginner Series topic, โ€œWhat is Syndication?โ€. In this series, we aim to provide high-quality information to individuals who are keen on learning but may lack access to professional resources.

The Scale of Investment in Real Estate

Real estate investing is a game of big numbers. Regardless of your wealth, the truth is, you’ll eventually run out of funds. You are then left with three choices, either borrow funds, raise capital, or remain content with small scale investments. Working with others in some financial capacity is essential in order to get leverage and scale up.

The Concept of Syndication

When you don’t have enough money to make large investments like purchasing a 300-unit apartment complex, it doesn’t mean you have to limit your investment capabilities. You probably have boarded an aircraft with strangers to a holiday destination. This wouldnโ€™t have been possible without syndication. Similar to how air passengers pool together to make air travel possible, syndication in the real estate context involves pooling together with other investors to make large-scale investments possible.

Benefits of Syndication
Enables large-scale investments
De-risks individual investors
Diversify the investment portfolio
Creates opportunities for passive income
Leverages shared expertise

Syndication is not a universal solution to every investment, but it makes it possible for a group of people to collectively engage in projects of a grand scale. As always, you want to conduct your due diligence because not every project is a good fit for every investor.

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