Christian OsgoodCEO, Multifamily Strategy · CEO at Multifamily Strategy

Real Estate Syndication in a nutshell

11 Mar 2024 · 0 min

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Christian Osgood breaks down real estate syndication: a sponsor creates an SEC-registered security, charges an upfront fee of a few points up to five, and raises capital from banks and small private investors. The sponsor manages the property, then exits and pockets the fee plus management compensation.

If you have no idea what a syndication is, I'll give you the 2-second rundown. Basically, it's crowdsourcing real estate. You're creating an actual SEC, you're creating a security. You're going to get paid a fee on the front end, usually a couple points, all the way up to— I've seen up to like 5 points, which is insane. But you're basically finding a deal, you're going to raise it with a blend of bank and private capital. People will put small chunks of money, but you'll get tons of people to fund this deal, crowdsource it, and then you're going to be paid to manage the deal and eventually exit the deal.