Introduction to Cash Flow Portal’s Marketplace for passive investors

Cash flow portal real estate syndications markeplace

Congrats, you landed in the real estate syndication Marketplace! You are on your way to lucrative real estate syndication deals to earn more passive income and obtain full financial freedom! If you’re new to real estate syndication, this guide is for you, but first, let’s establish what the Marketplace is.

The Marketplace is a platform that connects professional real estate syndicators with passive real estate investors. Now you can find deal sponsors, get access to an extended network of experienced syndicators and have complete transparency on their track record so that you can make informed investment decisions.

Real estate syndication marketplace

Let’s establish the fundamentals:

Real estate syndication/property syndication

It is a fancy term for a partnership between sponsors and passive real estate investors. Sponsors combine their skills, resources, and capital to purchase and manage an investment property they otherwise would not be able to afford.

You will hear terms like “passive real estate offerings”, “private offerings”, “private placements”, which all mean real estate syndication.

Real estate syndicator(s)/General Partners (GPs)

They are professionals that find the deals. They put in the sweat equity: nourishing relationships with brokers, accounting, tax returns, making distributions to passive investors, etc.

Passive real estate investors/ Limited Partners (LPs)

That’s you! You will invest capital in a real estate deal and watch your money grow through cash flow. Distribution is dispersed quarterly and you will receive monthly newsletters so you’re looped in on what’s happening.

The syndicators featured in the Marketplace have different levels of expertise but the most important metrics are located on their scorecards (like stats in basketball). We will dedicate an entire article to how to navigate the syndicator’s profile.

Let’s define what type of asset syndicators are acquiring: Multifamily properties.

Multifamily properties

This term describes residential properties with more than five units, but most deals include 100+ units. The assignment of letter grades (Class A, B, C, or D) is made of a combination of factors which include property age, location, income, level of tenants, amenities, appreciation, rental income, and more.

Multifamily investment property

You can invest in multifamily properties in top-performing markets anywhere in the country.

The Marketplace offers access to real estate deals

A common question you may ask is why can’t I just view deals and invest in real estate syndications directly? In order to get access, you must make a connection with a syndicator by clicking on ‘Establish relationship” on their profile. It’s the gateway to viewing an arsenal of money-generating funds after an initial call. We will soon have an article of sample questions you may want to ask syndicators. You may be added to their email list or investor database with information on upcoming deals.

Want to know why real estate syndication opportunities are so hard to find and why it feels like you’re part of an exclusive club or secret society?

The simplest way to explain this is two of the most popular exemptions under Regulation D General Partners use to raise capital from investors are Rule 506(b) and Rule 506(c). This can greatly impact your visibility and access to deals.

506(b): does not allow for solicitation so real estate syndicators cannot promote out deals on Instagram or TikTok. The average Joe does not know about deals until after a connection is formed. Thus viewing profiles and meeting with syndicators is the only way to establish a “pre-existing substantive relationship.”

506(c): allows for solicitation and advertising (which you may see on crowdfunding sites) but you must be an accredited investor. These opportunities are not available for sophisticated investors.

Accredited investors

The Securities and Exchange Commission (SEC) defines an accredited investor as either:

  1. an individual with gross income exceeding $200,000 in each of the two most recent years or joint income with a spouse or partner exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.
  2. a person whose individual net worth, or joint net worth with that person’s spouse or partner, exceeds $1,000,000, excluding the person’s primary residence.

Unless you are already in the real estate space or have wealthy friends, syndication deals are not as common as trading stocks. Also, given that the minimum investment is $50K, it is wise and worthwhile to know who you are investing your money with.

What’s more important: property or sponsor?

Sponsors of course! They use their depth of knowledge and experience to produce the best outcome in the face of adverse circumstances. Given that real estate investments have long-term horizons and are illiquid assets, you want a strong syndication team. What’s more important than evaluating the deal is assessing the syndicator and conducting your due diligence. The question all passive investors should ask is “How do I find the right sponsor to invest with?

Real estate sponsor vs property

Real estate syndicators should be passionate, competent, and work hard to give you the best returns possible.

Now that you understand the Marketplace and why we emphasize the importance of knowing your syndicator, let’s view an example of a profile.

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About The Author

Kristina Xie

Kristina Xie is a real estate syndication enthusiastic. She invests in properties in NYC, however became interested in large scale multifamily units after attending her first real estate conference in November 2021. When she is not actively interviewing people or writing articles, she enjoys the outdoors and traveling around the world!

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