Joining a real estate syndication will allow you to leverage other people’s money and invest together in a property.
In this Flashback Friday episode, syndication attorney Gene Trowbridge, ESQ, CCIM sits down with us today to give expert insights on syndications and how to become a passive investor. He lists guide questions to ask an operator who's presenting an opportunity for you.
As a founding partner of Trowbridge Law Group LLP, Gene’s law practice concentrates on the syndication of commercial and investment real estate, through both debt and equity. He has represented over 650 clients in this area of practice. The median offering size is $3,000,000 but he has done individual offerings of over $6 Billion. His practice writes offerings under Rule 506b and 506(c) of Regulation D. As a former syndicator who for ten years raised investor capital through the broker-dealer community, he is able to communicate with his clients on both the technical and the practical aspects of state and federal securities laws. As a long-time CCIM and CCIM Senior Instructor, he has won numerous awards for his teaching ability. His book “It’s a Whole New Business!” is really a “how to manual” on real estate syndication.
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[00:01 - 11:11] Who is Gene Trowbridge?
Gene talks about making great decisions on the kitchen table with his wife and the meaning of wealth
He discusses his background and how he ended up studying law at 45 and helping other people be good syndicators
His philosophy is to do a deal by himself first because he wants to make sure everything works before he starts to manage other people’s money
Last year, he sent 1,600+ K-1’s to his investors[11:12 - 21:26] What You Need to Know About Syndication
A syndication can be a great way for people to pool their resources and invest in a deal together
As a syndicator, it’s important that you figure out where the opportunities are and assemble a team that can capture those opportunities
Building your database of contacts is key
What he asks his clients who are interested in real estate syndication:
How did you get started?
What do you think is going to happen in the next three years with your business?
What advice do you have for rookies?[21:27 - 26:53] Questions to Ask and Vet Sponsors
What will happen to the capital if something happens to you?
There should be continuity
Never invest with an individual sponsor
Have you done this before?
Even if this is the sponsor’s first time, they should have something to bring to the table
Are you going to invest any money in this yourself?
If I need liquidity, how will you handle that?[26:54 - 31:19] Becoming a Passive Investor
Seek out education and be knowledgeable in real estate
Not everyone is equipped to be a syndicator and not every property should be syndicated.
The syndication business is a people business[31:20 - 39:52] Closing Segment
The final questions
Spread the risk and get diversified
Gene shares his strategy in choosing between Baltic...
