You Can Syndicate Anything

I’m on the way back from Las Vegas where I just spend the last few days attending the Pitbull Mortgage School hard money training program. The seminar was not so much about lending, underwriting criteria, and the state of the art in hard money transactions as I expected. Interestingly enough, it was about syndication. The objective of the conference was to show the attendees they could syndicate capital and form a pool so rather than brokering hard money transactions, they can become the principal and make the loan decision.
One of the speakers at the seminar likened the creation of a fund or a pool to the establishment of a bank, where the investors are the depositors and the syndicator or promoter is the president of the bank. The president gets to make all the decisions once the deposit money has been put into the bank. And then of course, the borrowers pay interest, fees and more while the bank takes all the profits.
Just as I like to hear about syndication, the audience at this conference was similarly mesmerized and motivated to start moving in the direction of syndicating assets. Unfortunately, this conference was only one day long so there weren’t a lot of details, but it did introduce many people to an idea they had never heard before. Now in order for them to take action on it, they have to learn the details of how to make a syndication happen. Some of those people will likely attend(the Real Estate Syndication & Dealmaking Symposium being held this November in Reno, because the focus of that program is the nuts and bolts of how to make it happen.
I’ve long said that syndication is not about real estate. It’s not about mortgages. It’s not about venture capital. And it’s not about any particular asset class. Instead, syndication is a method for capital formation. It’s a way to pool money so the promoter can acquire whatever asset class is of interest to him or her and the team they represent. As long as the investor understands the opportunity and risks about what is being syndicated, the sky’s the limit. Promoters can syndicate airplanes, yachts, bridges and more. I once syndicated an industrial plant, and I have also syndicated many start-up companies. And now I have been exposed to how a mortgage pool, especially designed for hard money business, works. Let me tell you, the syndication process is extremely lucrative.
If you’re tired of sitting on the sidelines, or if being an intermediary and waiting for other people to call the shots is not working for you, or if you’re someone who would like to be in control of your own destiny, stop finding people to buy a building. Go find the money to buy it instead. Syndication can, and will, change you for the better.
This week, one of the people who attended our program last year told me that he just closed a $2M capital raise. He continued, telling me his life has been changed forever. Not only is he receiving a very good acquisition fee, but now he will begin receiving month management fees and other remuneration. He has created new relationships with investors and referrers. And many of these investors will help cultivate many more dollars over time because of their own additional investments. Plus they will bring friends to the table.
Syndication is a predictable business that you can succeed in — if you put your toe in the water first and get started. If that’s interesting to you, then get involved in a syndication community. We hope to see you at the upcoming conference in Reno, Nevada. Whether you join us or not, I hope that this kind of information stimulates the entrepreneurial juices that flow in you so that you can move forward in your business or career.

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