When creating a Real Estate Syndicate or Fund, you need to consider all of the jobs necessary to make the offering a success. You are starting a new company – and every new company has certain jobs that need to be filled.
Initially, one or two people might do all of them, but if you want to grow, you will need to build a team with the right skill sets that match the jobs you are trying to fill, and that can free up some your your time to go out and pursue more or bigger deals.
The objective of an Asset Manager for a fund or syndicate is to fill all these roles listed here with 2-5 team members. An initial meeting should be held with prospective members so they can volunteer for tasks they are competent to handle. Members earn their share of management fees and profits for the tasks they perform. Tasks that aren’t performed by members must be hired.
- Attend Educational Events/Hire Coach/Learn about the Asset Class
- Find Deals (Negotiate Acquisition Terms) — Specific tasks may include cold-calling or sending letters to property owners and real estate brokers, gathering data on prospective deals, crunching the numbers to determine offer prices, and making offers.
- Underwrite/Analyze/Determine Feasibility for Investors
- Conduct Due Diligence (physical issues, regulatory issues, construction bids, etc.)
- Work with Corporate Securities Attorney (Corporate Structure/Securities Compliance/Offering Docs)
- Prepare Investor Marketing Materials to Promote the Offering
- Work with Real Estate Attorney (PSA or lease; title/escrow/loan docs; vendor contracts)
- Raise Money (Everyone’s responsibility) — This includes coordinating and presenting pitch deck to investors at webinars/live events/one-on-one meetings (phone or live); attending local meetups to meet investors; holding networking event (2-hour cocktail parties, etc.); and holding suitability meetings with potential investors.
- Oversee Property Manager
- Prepare Status reports; Maintain Investor Management Platform
- Manage Investor Entity Bank Account
- Pay Distributions to Investors and Management
- Evaluate and Make Investor Distributions Quarterly
- Oversee Bookkeepers Weekly or Monthly; Work With CPA on Tax Returns (annually)
- Contribute “At-Risk” Capital (Everyone’s responsibility) — This includes contributing (for reimbursement post-closing or conversion to an investment) all of the pre-closing expenses necessary to acquire the deal (you can’t use passive investor funds for this).
- Guarantee Loans — Even non-recourse loans need guarantors with collective net worth equal or greater than the loan amount.
The graphic shows how you should allocate your earnings to fund those job responsibilities:
These are the type of things we discuss on our weekly Clients-Only masterminds. If you are a current or past client, you are always invited to attend. We hold them on Wednesdays at 12:00 pm ET. Please email info@SyndicationAttorneys.com and we will send you the link.
If you want to be invited to our weekly clients-only masterminds, schedule a call and ask about our low-cost pre-syndication agreement that will get you access to the masterminds plus some other clients-only perks, like an Investor Marketing Plan template, an Investor Relations Blueprint, a Pitch Deck that you can customize to teach investors about syndication, and more.
Please schedule an appointment at SyndicationAttorneys.com/Consultation to learn more.
