Things Every First Time Investor Should Do Before Investing In Their First Real Estate Syndication
Updated: Apr 30, 2020
Real estate syndication remains a mystery to many who are not entrenched in the world of real estate. And even for those who have real estate experience, it still seems like a mystical Unicorn, heard of, but never actually seen in action.
When you are considering syndication as an investment opportunity for the first time, it can seem daunting, intimidating or as if you are going into things blindly.
At Vidente Capital, our goal is toguide you through the process of educating yourself, so that you can feel comfortable moving forward with the investment.
I personally, was a little wary of the idea of investing in a property I’d never seen. You wonder how you’ll get your money back, and there’s this unsettled feeling at the idea that you can’t simply log into your online portal and see your money sitting there.
My fears were alleviated by doing research. With every article I read and every person I spoke to, I began to feel confident that I could take the plunge.
If you’re considering investing in your first syndication and are feeling hesitant, I recommend doing some research, connecting with other investors, reading through previous deals, and taking your time to gain some confidence.
1. Hit the Books
Whether you are investing in a syndication, or are embarking on a journey to invest actively, I believe the best way to build your confidence about investing is through self-education and research. Listen to podcasts, read books, and find websites on real estate
Rich Dad, Poor Dad by Robert Kiyosaki
Apartment Syndication Made Easy by Vinney Chopra
Best Ever Apartment Syndication By Joe Fairless
Best Real Estate Investing Advice Ever with Joe Fairless
The Real Wealth Show with Kathy Fettke
2. Ask Questions
Relevant Facebook groups and forums like BiggerPockets can help you learn what questions you should be asking. More than likely, there will be other people that have similar concerns and just by reading the forum’s questions and answers, you’ll gain clarity.
As always, No question is a stupid question and you have the right to have your concerns addressed.
3. Talk to Other Investors
In order to be successful, you need a supportive community. Real Estate requires a team and considering that syndication is a group investment, you’ll want to start networking.
Other new investors will share similar questions, anxieties, and fears. More experienced investors can provide invaluable knowledge and firsthand accounts of their experience.
Find other investors through online forums like BiggerPockets, local networking events, or by asking your sponsor or someone you know to connect you with someone that has invested before.
4. Look at Prior Deals
It can be overwhelming looking at investment summary data and financial projections, and you may have difficulty understanding the investment lingo if you are new to the investing space.
With each investment summary you review, you’ll begin to understand how the deal packages are put together and what you will find in each section, how you will receive your distributions, how the sponsor communicates, and you’ll begin to narrow down which investments interest you
5. Take Your Time
New investment opportunities can fill up quickly. This can make new investors panic and worry that they are missing the best deals. Real estate has been around for ages, and will be around forever. There will always be another opportunity. You want to begin your investing journey as soon as possible because putting the power of compound interest to work is a long game. That being said, you want to allow yourself time to complete these steps if you are having doubts, so that when you do take the plunge, you are confident every step of the way.
We are all different in how we approach things. Some of us are very decisive, while others need time to contemplate. Some of us realize that without risk, there’s little reward and find solace in knowing that the risks are calculated, while others are risk averse and get hung up on what-ifs.
If you take nothing else from this article, remember it’s completely normal to have mixed emotions regarding investing. You may be skeptical, anxious, and excited all at once.
Your ability to take action and do whatever you need to do to feel comfortable is what separates the successful from those who give up. Your first real estate syndication deal is a huge milestone in your investing journey, and, even though your head might be spinning right now, this is a time to savor because you will look back fondly and be proud that you made an educated decision.
And remember that we at Vidente Capital will be here to help you every step of the way.
Taking our Passive Investor Fundamentals Course and Joining the Vidente Capital Investment Club are steps that you can take to begin your investing education.