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3 Primary Ways an Apartment Syndicator Makes Money on a Deal

Written by Joe Fairless | Mar 16, 2017 5:16:57 PM

Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any multifamily investment properties and multifamily syndication and syndications or real estate syndication deal according to the securities act of 1933, investment strategy or course of action.

Apartment Syndicators:

There are countless ways for a multifamily syndicator (also referred to as sponsors or general partners) or real estate syndicator how to generate money from APARTMENT SYNDICATOR deals with an investment opportunity. How do estate multifamily syndicators and multifamily syndication generate money? real estate syndication passive investors real estate attorney deals? However, three are the most common.

#1 Acquisition Fee

The first primary way that a multi-family syndicator makes money is with an acquisition fee and refinance fee. The acquisition amount compensates the syndicator for their make money time for putting the entire apartment syndication deal together, from start to close.

The acquisition amount charged can be anywhere from 1% to 5% of the purchase price. I’ve heard upwards of 5% at certain seminars I’ve attended but I’ve never actually seen it in real life. And I’ve actually personally seen acquisition charges of less than 1%, which was what I charged on my first deal. At the time, the primary residence I didn’t know about the acquisition charges, and real estate investing syndication deal put together or accredited investors and I backed into it after I talked to my sophisticated investors, which resulted in a very awkward conversation!

If a syndicator were to charge a 2% fee of acquisition, apartment syndication and multifamily syndications, joint income, tax breaks, and preferred return for example the apartment buildings and sales price is $1 million, it would be $20,000 paid to the syndicator at closing.

#2 Asset Management Fee

The second primary fee is an investing in real estate deals management fee and real estate property and investment property passive investors. I’ve seen this fee collected in two different ways.

First, an asset management amount can be charged as a percentage of income. The industry standard is 2%. If a property collected $100,000 in income per month, the syndicator would receive $2,000 each month.

Another management for asset fee structure of the investment group and investment company and asset class property management team is an equity investment stock market cost per unit per year or annual income business plan. The standard fee I’ve seen for retirement plan accredited investors balance sheet, investors pools, operating income, tax benefits, track record, mobile home parks, subscription agreement, and guaranty fee is $250 per unit per year. If a syndicator is managing a 100-unit asset, refinancing fee, cash investment, or property management company they’ll be compensated due diligence $25,000 per year.

I personally don’t like the latter approach cash flow apartment syndication – apartment building cost per unit per year – because it doesn’t show the alignment of interest. No matter how well or poorly the property performs, the securities and exchange commission apartment community property manager, or apartment complex the syndicator’s compensation remains the same. Therefore, I prefer the alignment of interests that receiving a percentage of monthly passive income provides.

 

#3 Percent Ownership

The third primary way a syndicator makes money is by getting ownership interest in the entity that owns the property. Ownership can be anywhere from 10% to upwards of 70% limited partners. It depends on the private placement deal with a limited partner, how much money the rent roll syndicator personally invested in the loan guarantor profit split, wall street, email address, market value, and the overall opportunity for the investors' apartment deal market cycles.

A typical example is the investor relations gross income k 1 limited partners investment opportunities in a commercial estate in syndication deals estate attorney and real estate assets (i.e. the investors) receiving 70% ownership and the general partner real estate syndications multifamily syndication voting rights of apartment syndications (i.e. the syndicator) receiving operating agreement the remaining 30% apartment syndication. These confidential private offering memorandum percentages equate to dollars when you refinance fees, preferred return, net worth, or sell the property. While putting together this method lacks consistent cash flow, real estate syndications and multifamily syndication as long as the syndicator performs limited partners for the investor and real estate syndicators, it’ll turn out to be significant dollars at the end.

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Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.