How to Structure a Syndication Deal for Your Fund in 2026

Hey guys, welcome back. So in this episode, we're going to talk about specifically how to structure a syndication deal. If you've seen previously our Fund Launch Formula method, how you can build a track record through syndication deals, that's great. Sounds awesome, Bridger. I want to set up a syndication deal, but I don't know exactly how to structure it and go about doing this. Now typically for most people, their first what I call fund or first time raising money, I would say syndicates are usually the best way to go. They're easier to set up. You can get things done a lot faster. It helps you prove and build a track record for yourself. If you don't have a track record, if you're like me, people like us, right? We don't have this 20 years of Wall Street experience to lean on. We don't have this crazy incredible XYZ pedigree or MBA, whatever, from some school. We have to work, and so syndications are a great way to build a track record, and even if you do have that stuff, a syndication also helps you get your feet off the ground and get running. Now, when I first started out and I was learning about funds, I— something that confused me a lot was the differences between syndications and different types of funds and what they were. So you can see on the board right here, we have a few different structures that you can choose from. Now in this video too, you can choose, right, what you want to do. Up here, both of these structures are going to be fund structures, okay? Actual fund. And this is your general partner limited partnership structure. You guys have seen that before. The GP manages the limited partnership or the fund. Limited partners invest into the limited partnership. The general partner manages that fund or limited partnership. If you guys have seen me do these boxes before, I'll draw them out, right? You've seen this before. This is your limited partnership. This is your general partner, that's you, and then all your LPs, your limited partners, will invest into that limited partnership, and then that limited partnership goes and makes investments down here, buys up assets, and then when those assets make money, they flow to the limited partnership, and then they split between the general partner and limited partner Is that making sense? That's the most common way to set up a fund is this general partner limited partnership structure. In a close second, a lot of funds are now doing this more and more, is an LLC type of fund. This LLC fund, you've seen this before too, just a little recap if you're okay with that. LLC funds have Class A shares and Class B shares. Class A shares are your investors and Class B shares are your management team. You call them Class A because your investors feel great. Class A shares, they feel awesome. But in reality, the Class B shares manage and control the fund. That's you as the fund manager. You're in the Class B shares. And then finally below, we have our syndication deals. And I'm going to talk about a lot about this today and this and how to structure these. But typically this is just a simple LLC, limited liability company. Okay, and we'll talk about that structure here. Now where I get confused, where I was confused for a long time, was this. Okay, so you have these 3 You have 1, 2, and then 3. These guys is an LLC. This is also an LLC, but just structured differently. And they have Class A shares and Class B shares, and they usually have a PPM and an operating agreement. And then a general partner limited partnership, they have their PPM, private placement memorandum, and an LPA, limited partnership agreement. But also the GP right here can also be an LLC. This entity Isn't called a general partnership entity. It's an LLC, but it's now titled and labeled as a general partner for limited partnership. And that's— if that helped a little bit, that confused me so much. Is if you say, oh, I have an LLC for my fund, like that doesn't mean anything, right? It could be option number 1, the general partner limited partnership. It could be the LLC Class A share, Class B share fund. You still have a PPM, still about the same amount of money to set up, very expensive to do those types of funds. Unless you follow the Fund Launch Formula. Number 3 though is the syndication is a simple LLC, okay? So I'm gonna leave these up here and we'll go, we'll kind of be referencing these back and forth throughout today's episode. So a lot of people, this is kind of the split between the fund model up top and on the bottom you have syndication deals. Now if you guys remember back to the Fund Launch Formula, okay, I'm gonna draw those circles out, the boxes. Step number 1 is you find an amazing deal. I'm gonna write deal. 2 is you frame the deal out. 3 is you go and pitch investors. And then 4 is you set up your legal docs. Okay, that is the lean. This is the best way to launch a fund. We have dozens of students launch funds this way. This is how I launch my funds. A lot of our mastermind mentors follow the same process of pitching, finding the deal first, framing it out, and then pitching investors. Don't do your legal docs yet to follow this. Now this breaks up into— you can either choose the fund model or syndication model. Okay, so on your legal docs, you can decide to do the general partner or LLC model or the syndication loop. Okay, and the syndication loop is essentially the best example I have is like real estate flippers. Real estate flippers, these guys are— they're masters at syndication deals. So what they do is they find a great house, they love it, they go pitch their investors, they follow the fund launch formula, they frame it out, they pitch investors, they get money, they set up an LLC, and the investors put money into the LLC, they do the deal, and then everyone gets paid back out and all the investors get paid out, okay? And then they'll go find another deal, set up a new LLC, new investors, and maybe the old investors got to renegotiate, set up the deal, and they do it again. The fund model is beautiful because you have to set it up once, you raise money once, and you can do as many deals as you want up here. So you can find the deal frame, set up your money once, set up your legal docs once, and then you can do as many flips— and let's call it house flips— any house flips as you want. Pretty cool model. We have a whole episode, Fund vs. Syndication, you guys can walk through that. I just wanted to recap it for a second. So Bridger, back to our thesis, our topic for today. How do I set up these syndication deals? What does it look like? Inside of here. So let me erase this for a second. Okay, so an LLC syndication deal. Now let's go back to the real estate example. We'll use a few different examples for today, but let's go real estate for a second. Okay, what you'll do is let's say you found a multifamily property. It's got, let's call it, 10 units in it. You'll go find investors. You still follow the Fund Launch Formula to find the deal. You frame it out, you pitch your investors, they put money in, you set up an LLC, and everyone putting money in is an equity owner of the LLC. So imagine like a pie right here, okay, and you are saying, hey, I'm gonna own 20% of the pie because I did the work, I set up the deal. I mean, I did all of it, and I'm gonna put in a little bit of my money. I'll put in probably 5% of the money, but the other 15% I'm taking because I'm doing all the heavy lifting and work. And then you tell your investors there is 80% available pro rata how much money you put in. So pro rata means just percentage of how much money. So if you put in half of the money for this deal, you would get half of the 80%. So you'd essentially end up with 40% equity. Okay, so 40% equity, and you are truly— they are truly an equity partner in this deal. This is not like the Class A, Class B shares up here. They are truly equity partners in this deal. You own 20% equity And you're— let's say your other investors put some money in, blah blah blah. They each take like 10% each, okay? The rest of them, okay? And I'll just put a little squiggly here for the rest of the investors. I'll take 10%. Now they put money in. These guys are equity owners. And on the documents, you have an operating agreement, is what it's called, operating agreement, which in our mastermind course you guys will have access to and you can download it and tweak it for your purposes. They have an operating agreement that says they— and you might have to tweak this— but it says that they are full members of the LLC, the entity. They are knowledgeable, they understand the business operations, they're just as liable as you are and you do that on purpose. If they give you money for the purpose and let's say because a lot of people say, well, can the investors give me money in an LLC syndication? I'm going to manage the entire money with my 20% and pay them out essentially like a fund but not really a fund. If the SEC found out you were doing that, they would come whack you and say, well, it really wasn't a true syndication deal. It was more like an LLC where you had all the voting rights, they had no voting rights, and you were essentially managing their monies and buying and selling securities. Now, I know there are thousands of syndicates that get set up that way every year and the SEC never finds out. You know why? Because the SEC doesn't get a complaint. The SEC will only really investigate you if you hit a— you're really big, you're a massive level, or Or most commonly for guys like us is you get a complaint from your investor. If everyone's making money and everyone's happy, the SEC is like, great, we got— they have plenty of complaints to go follow up on, right? They don't have enough time to just research every fund. Only when you get a complaint to the SEC is when they'll come follow up. So, if one of your investors, if you guys lost money and one of your investors was mad, you know, I gave my money to Bridger, he did terrible with it, it was awful, he lost those money and I didn't have voting rights. The SEC will come look at that and say, well, you really weren't running a true LLC syndication. You were running more of like this. Step number 2, an LLC class A shares, class B shares, and therefore you fall under the 1940 Investment Company Act, and therefore you are under a lot of scrutiny and regulation from the SEC, and you didn't file your certain documents right, you didn't set it up right. So, that all being said, do not bring on new investors in your syndication and say, hey, you're going to be a silent partner and I'm going to do all the management. On paper, you can't say that. Now, between the partners, the understanding could be, hey, you're putting your money in, I'm gonna do most of the day-to-day. I'm gonna do a lot of the operations, I'm gonna do all that, and you're gonna be more of a passive investor. So that's maybe word of mouth back and forth, like that's how it's gonna run. But on paper, those investors, this 40%, this 10%, these guys are knowledgeable investors. They understand, they are making decisions like you are just as much. They understand what is going on inside of this investment, and they are just as liable as you are. That's how you can set up a syndication where You don't need to fall under Investment Company Act because these guys are all— you're potentially owners of a business all putting money in together to go do a deal. Is that making sense? Are you guys with me so far? So, do not make these guys silent partners on paper. Now, if you want to make an understanding between them and they understand that, that's okay. But when it comes down to it, if you're getting sued, they have voting rights. They can do whatever, you know, they're an equal partner in the business as you are. Which comes to my next point of why syndicates are a little bit riskier to set up. Syndicates are risky because these investors over here, if they don't like you, they don't like Bridger, Bridger is running the syndicate. You know what, we have this 10-unit apartment complex, I don't like how he's running it. They could get together and force you out and push you out. They've got big lawyers, they've got money behind them obviously. They say, hey, we got a big lawsuit coming your way or you can just step down and resign, and usually they can butt you out of deals. Now, one way to protect yourself against that on your operating agreement is you do something like this. You say, hey, You have 20%, back to the same example, you, you'll say this: no person can be voted out unless you have 81% vote. It needs to be a supermajority vote to vote somebody out. So that should protect you if you have 20% equity, unless you vote yourself out or somehow lose your equity. There's no way that you're kicked out of your own LLC. However, if these guys are big dogs, have huge lawyers, they're going to ruin your life and they really want you out, they might be able to squeeze you out and do an aggressive takeover on the company. Legally, they shouldn't be able to do that, but if they're going to run you through— they're going to run you $400,000 of legal fees, you might just say it's not going to be worth it to go in this battle, in this fight, and I'll just give up the equity and move out. That's why syndications get a little bit scary when you're setting them up. Now, I hope that doesn't deter you from setting up syndication. I think syndication deals are a great way to get started, and most small-time investors— this pool of money is usually family, friend, acquaintance, people in your area. Usually, it's not a huge These aren't corporate takeover type of people coming together for a syndication deal on a 10-unit apartment complex. They hope they can just put money in, you'll run the day-to-days, and they're gonna get a check every 6 months or every year, every quarter, every month, whatever your syndicate is telling them they're gonna receive. And I've actually seen lots and lots of syndicates work out just great, and the investors love it and want to reinvest with you in the future. That's how most— back to our original example of house flippers. House flippers go, they do a flip, they have equity partners sometimes, sometimes they have debt partners with hard money loans, They pay everybody back out and they go, great, that was awesome, let's do another one. And they go and they go set it all up again. They got to renegotiate terms, they got to renegotiate all this value and equity and everything, and they do another deal and they pay everybody else. And that's why a lot of people call this the hamster wheel of syndications, is it turns into a hamster wheel. It's a great hamster wheel, it makes you some money, but it's, it's hard to really scale. And that's why most people eventually end up scaling through a fund and following the GPLP or LLC Class A share, Class B share model. To scale because you only have to raise money once and you're protected from your investors. We talked about this in other videos but in a GPLP partnership, your general partner, you could have an investor with a billion dollars invest in your funds and they could call you up, I hate you, Bridger. I don't like what's going on. I want you to sell stuff early, XYZ. They want to direct fund. You say, sorry, you are a limited partner. You are limited in your liability and you're also limited in your decision-making. We are the experts, the fund managers over this pool of money. And we are going to make investing decisions based on what's best for the fund. The fund is our client, not you as an individual investor, and you'll see that in some of our other videos. Okay, so back to the syndication deal. This is just one example of a way you could set it up. You do the 20% and the rest is available. One of our mastermind mentors, Aaron Wagner, he does most of his deals, he follows this syndicate model. However, what he does is this. He says instead of doing like a 20% or he keeps 15%, he goes, I'm taking 51%. I'm setting up the deal and he puts down some money as well. It's not like he's not putting any money in, he puts a little bit of money in but he says, guys, I'm taking 51% and people will be like, whoa, whoa, what are you doing? You're taking 51%, that's so much. I can't believe you're doing this, and some people will balk at it. He says, well, you can either have 49% of something or 100% of nothing, right, and the returns— I've showed you the returns with 49% ownership, you're still gonna get a fat return. Well, don't worry about what I'm making. I'm setting this whole deal up. I've brought this to you. I'm bringing this deal to you and this is the offer. There's 49% available. Back to our pie chart, okay? Aaron's going to keep 51% over here and the 49% is available for investors. So if you put in half of the money, you would take 24.5% of the equity. And he usually raises money from a handful of different people that slice up that 49% and they're essentially silent partners but still follows those same rules where they're equity partners in the deal. And Aaron runs the deal and the reason he does that is so that these guys can get together and ever sue him. He says if he's 51% owner, even with other clauses, it's very hard for him to be booted out of his own syndication deal, and that's the way he's been able to scale doing that. Now, I wouldn't recommend that on your first syndication deal. I think it'd be hard for investors to— for a first-time person ever doing a deal that you don't have a track record, for you to say, I'm going to take 51%, I think would be a little bit aggressive. I think closer to 20%, 15%, 30% in that range seems more reasonable. However, it all— the best thing about what we talk about, it all comes down to your market and if you follow the fund launch formula and you find deals, you frame it out and you take it to investors and let's say you pitch this 51%, 49% and you go pitch 10 investors and 9 of them say get out of my office, it's a bunch of bullcrap but one of them says yeah, I'll go for it and they put money in. Well, great, like it worked, right? Like it all comes down to your investor base, your marketing base. Sometimes you'll go pitch, you'll go pitch 10 investors and all of them will say, no, it's too high. You go, okay, you go back to step number 2, you reframe it out and you say, guys, you know what, you were right. I was being a little bit aggressive. I'm gonna come back and this time I'm gonna do 70%. And same deal, same thing, but I want to give you guys more. I, you know, I think I was wrong trying to take too much. I want to give you guys more. I'm gonna take 30% and 70% is available. It's still a great deal. You guys said it was a great deal earlier, and that's what we're gonna do. When you follow the Fund Launch Formula, you can use your investors as market testing. That's the most beautiful thing about it. Now, as you can see, there are pros and cons to syndications versus funds. I've already talked about a few of them. The risks are a little bit higher here, but this is probably one of your first deals you've ever done, and so it's okay to take a little bit of risk, and your investors understand that risk, right? And that's why we only go after accredited investors or above. I don't want to take money from small-time investors, get their money together. If I lose it, Man, it's a bad deal. If I take money from credit investors or qualified clients or qualified purchasers even, I lose on a small house flip. Let's say I lose each person, you know, $15,000, $20,000. They're gonna be just fine. Those qualified purchasers are losing $15,000. Yes, they're gonna be mad at you, but they're gonna be just fine. They're gonna be able to pay for groceries, pay their mortgage or rent, whatever they're doing with their life. It's gonna be pretty much the same, and they probably knew going into it, this is a first-time deal, this is a first-time fund manager. I'm gonna take a chance on her or him. Give them some money, let's see what they can do, and that helps take a lot of the stress off from me of managing other people's money. Yes, it still is stressful, it's a responsibility that I feel that we, you know, we as fund managers and syndicate managers need to manage money well, but it takes a little bit of stress off knowing that if it all goes to pot, they're going to be just fine, right? If it was my grandma's money, I would feel just— I would feel even worse, right? My grandma doesn't even have money to live in her retirement, right? But if it's a credit investor, I don't feel as bad, and then the other thing to take off that pressure is I always invest Right next to my investors. I always make sure that I put it, and I call it a significant portion of my personal wealth, I invest into this deal and fund because I believe in it that much. I have skin in the game, and I'm not just gonna walk away from this deal in 3 months if it gets hard because I am invested with X amount of dollars into this deal. So I hope that helped with syndication deals. Drop, you know, comments, questions below if you have them, or in our Facebook groups if you have questions about syndication deals, how to structure them. That's typically what you're gonna do. You can use the operating agreements. If you're in our mastermind program, you have the operating agreements, you have all the legal docs you can use and edit and tweak. We have lawyers that can help you out to get this thing structured and off the ground. But the nice thing about syndicates is you can do them very fast. They usually doesn't take that long to set up. Funds will take a little bit longer, a little more time, more lawyers, more filings. Syndicates, I mean, you can set up your LLC and operating agreement in a couple days and have money going and do a deal fast, and that's the beautiful thing about syndication deals, especially for first-time fund managers, is syndications can help you build that track record. My first fund that I call a fund was a syndication deal. Hope that helps you guys, and I will see you on the next episode. Peace.