Eight Steps to a Successful Real Estate Syndication

attorney with the Muscatine syndication Law Group. I'm also a real estate syndicator and developer myself, I thought it would be interesting to break down to distill in to eight difference and an eight step model of what a real estate development syndication project would look like what they look like from a very high level. Now, each of these probably has another 50 different steps. But I thought it would give a unique

view of, of what the landscape looks like. So that if you are looking to do a real estate, syndication development project yourself, it might give you an idea of whether or not it's something that intrigues you, or it's something that you want to run from, I think it probably will intrigue you enough that you'll want to keep working on it. But who knows. So let's go through what those eight steps would be. So number one, is find

the suitable property and created business plan. Now, obviously, if you're going to develop something, you gotta have something to develop on. And you got to know kind of what

you're developing, right. So for the the piece on the business plan, I like to rely on the fit, of course, the founder investment theory, what it is actually, that you're going to be building should also have a compelling vision behind it, a reason for why an investor would want to invest into this, if you were going to invest in this completely blocked thing that nobody would be very interested at all, you're gonna have a really hard time finding an investor who's going to help you

out do that. If, however, you're building this fancy resort, or you're this beautiful luxury apartments with a with fountains and a lake or if you're building, you know, the retail center that features some some new novel technology or something like that, that's compelling, that's got a story to it, and people investors are going to want to invest. And then you obviously need to find that property where you can do

that. And then you need to make sure all the numbers line up. So the business plan needs to be complete with exactly how you're going to do it. In terms of costs, you got to have pretty early on what those costs roughly are going to look like what the hearts cost side the soft costs. So what that looks like, that way you can start building in a story for your investors. That's not just an emotional compelling story, but also has a rational, this is what we're going to do component

to it. Number two is start assembling your team, you can not do development alone, you're going to be out there swinging a hammer yourself, I don't think so, if development is a big team effort. So you've got to start putting those team together, this team is also going to be important for your investors to know who they are, because you're using their resumes in addition to yours as reasons for them to invest, the more great a people that you've got, the more interested in investors going to

be to be involved with. So that is also a major part of it as well. It's great to give, give a helping hand to the people who, who you know, is does great work, but they don't have a resume to speak for itself. That's great, but you gotta have some heavy hitters in there as well. And mostly though, you need to make sure that it's competent, that it's a team that have players that absolutely can deliver, you've got investors

money here, you've got to deliver for them. Number three, now, you got to find investors, you should have been looking all along, you should always be looking for investors every day of the week, every week of the year, you should be looking for

investors growing your investor network. But this is the step now where you're really finding investors and starting to let them know that you've got this project coming along and are they interested, you got to get those soft commits, you got to make sure that the business plan can go forward and then their money is part of it. Step number four is arrange for financing. So you're going to most likely be using not only investor money

and you're not going to be paying all cash. Most likely most developers use US bank loans or hard money loans or some sort of other form of money in order To complete the project, so you need to start building those relationships with those financers. Whether they're hard money lenders, or traditional bank lenders, wherever it's coming from start building those relationships, so that you can get that financing in place, start building that model of what it will look like,

from their point of view, how, what's that interest rate? What are the terms? What is that going to look like? Number five, my favorite piece is putting the syndication together. So that piece of it, this step really is putting those necessary documents together, getting that private placement memorandum done, the operating agreement for your entity, the subscription agreement for your investors, getting it ready for filing with the SEC, as soon as you make a sale of the

investment to a investor. Getting all those pieces together, this is an exciting time, because now you've got really something to show for. Not only that, not only is it the legal documents, but putting the marketing documents together. And once those are done, it's getting investors in. So this is all part of that still putting that syndication

together. It's not just the framework of the documents and the marketing material, but it's also getting the commence from your investors getting them to sign getting that pool of money. Once that money's there, then you can go on to Step six. And Step Six takes place at a lot of different points. This is just getting those necessary approvals. Development takes

approvals from everybody, as you probably know. And so you need to be doing that all along the way so that your project doesn't stall just because the fire marshal hasn't signed off on your deal. And it's now waiting for two years. That's not a good situation. Number seven, now you see it coming together. Now you're managing the construction, you can watch it going up in front of your eyes. And it's a magical and it's all happening. This is another very exciting part of the development

project. Because here it is, all the meanwhile you're communicating with your investors, and you're getting them excited. Why are you getting them excited, because you want them to invest in your next development project. So the more excited they are, the more they feel like they're connected to the project better. Step number eight, marketing and sales, and I'm talking about marketing and sales for the future sale of the project. Now I'm assuming in this video that

it's just being a it's a build to sell. If it's a build to rent, then that's another story, then you're still marketing, getting that marketing ready for getting tenants in. If it's marketing to sale, you're getting that that what the landscape looks like in order to be able to sell this development

that you put together. Once it's there, then you're you're now putting it out to market and you're getting it all done and and you pay off all of your investors and it's a grand day and you've completed your first real estate development syndication from opening to closing. And that is the basic process. So let's go over those key eight steps one more time, just so that they're there. Number one, identify a suitable property create a business plan. Number two, assemble a team.

Number three, find investors. Number four, arrange for financing. Number five, put together the syndication. Number six obtain necessary approvals. Number seven, manage the construction, and number eight marketing and sales of the underlying asset itself. My name is Tilden Moschetti. I hope you found that helpful and a little bit enlightening looking at the development process and syndication together from a high

level about how it all comes together. If we can help you with your real estate syndication development or a real estate syndication or any kind of syndication or private equity fund, you're putting together give us a call. We'd be happy to talk with you