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by | 11, Mar 2022

Bonus Episode: The Key Team Members In a Syndication.

That’s right, it’s Friday! End of the week! And to celebrate, you’re getting another bonus episode!

In a YouTube video released today, Anthony breaks down the 7 key team members of apartment syndication.

The limited partners and general partners have had plenty of time in the spotlight, now it’s time to hear about some of the other key players on the team!

Who do you call if there is a legal issue or contract to review? Who brings in a majority of the loan value? Who guides you through the taxes?

We answer all of this, and more, on another bonus episode of Multifamily Investing Made Simple.

If you want to watch this video, just give that YouTube link a click!

Tweetable Quotes:

A good CPA is just like a lawyer. They’re going to save you more money than they cost you.”  – Anthony Vicino

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To learn more, visit us at https://invictusmultifamily.com/

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** Transcripts

Anthony Vicino: [00:00:00] Today, we’re going to talk about the seven-team members on every syndication, so stay tuned. Hey, what’s up, everybody, Anthony Vecino here of Invictus Capital and author of Passive Investing Made Simple and the co-host of Multifamily Investing Made Simple and Awesome podcast. Go check it out. All right, so let’s get into it and talk about the seven key team members on a syndication. But before we get to that? Don’t forget the Smash the Like button go hit subscribe means a lot to me gives me all those warm and fuzzies. So thank you. All right, so if you want to be part of a syndication, whether you are thinking about being the active partner or you’re thinking about being a limited partner, you got to know the seven key team members. So first, let’s talk about the partners or the members in the deal. Like I just alluded, you got the active partners, you got the passive partners otherwise known as the general partners or the limited partners. Now remember, every deal needs three things it needs somebody who has the time, somebody who has experience and somebody who has the capital. The beauty of syndications is that no one person or one entity is bringing all three of those. We can split them up. And so the general partners are our active team members. They’re the ones out there who are putting in their time and their experience to find the deals, to source them, to bring them to closing, to then operate those deals and then to sell those deals.

Anthony Vicino: [00:01:25] They’re the ones that are doing all the work, dealing with the toilets, the tenants, the trash, our passive partners, the limited partners. They’re bringing the third part of the equation, which is just the capital. They put that money in and then they sit back and they collect that cash flow. It’s beautiful. Beyond that, though, we have some team members that are going to facilitate us actually getting these deals done. And whether or not you just want to be a passive partner or you’re thinking about running the whole show and being the general partner yourself, you got to know who’s all involved behind the scenes. So number one, we have the brokers. This is massive. If you want to get deals done, it’s probably going to be done through a broker. You can go off market. Sure, that can be a very powerful way to get deals done, but it takes a lot of time, takes a lot of energy. And honestly, for most investors, you’re probably better off just going straight through a broker. Think about it. This is what they do all day. They’re pounding the pavement, making phone calls and trying to source deals. Yes, they’re going to take a cut, but generally it’s worth the time savings that it’s it’s saving you from not having to be the one that’s actually out there doing all the hard work.

Anthony Vicino: [00:02:29] Number two, you got the lender and the lender is the biggest partner on any given deal. I don’t care what anybody else says, they’re bringing somewhere between 70 and 80 percent of the loan value. That’s a lot of money. That’s a big partner, and they’re going to wield a pretty big stick. So if the deal doesn’t go to plan, they’re going to take back that asset, they’re going to foreclose on it. They might even come after your personal assets. So when it comes to partnerships, even if you’re a limited partner and you’re just putting cash in and yeah, you’re protected behind an LLC and all that great stuff, it’s still really important to understand the loan terms and the banking partner that your general partners have decided to work with. Number three is the property manager, and this is huge because it’s not enough like people get really excited about closing a deal because it’s kind of hard to find a deal these days. It’s kind of hard to close the deal, so you should pop the champagne. You should celebrate. But don’t forget, that’s just the starting line. The deal has now begun. We have to actually operate the deal because it’s not good enough just to project returns. We actually have to deliver returns and that’s where the property management company comes in. There’s a couple of different ways the property management company might be structured.

Anthony Vicino: [00:03:32] It could be a third party, a company that just handles properties for operators, and that’s all they do all day long. They’re professionals at it and they’re great and they’re going to take their fee as a result. The other way is to have an in-house property management company. That’s what we do at Invictus Capital. We have Invictus management. That means is we have our own staff, our own systems who are dealing with residents every single day, staffing it, dealing with maintenance repairs. There’s no right or wrong answer. It’s just a matter of knowing who is that team member. What’s their experience? How good are they? But that’s that’s going to be a role that you need to think about getting filled. And number four is the attorney lesson. Nobody likes lawyers. If you’re a lawyer, I’m sorry. That’s true. You know, don’t don’t hide. Nobody likes attorneys, but you got to have one. You got to have probably multiple. When it comes to syndications in particular, there’s so much paperwork you’re going to need your general counsel to go over operating agreements and you’re going to need an SEC attorney to go over the private placement memorandum, otherwise known as the APM and the subscription docs. If you cut this corner, if you’re an operator, I’m looking at you right now. If you’re an operator and you’re thinking, I’m just going to save some money by going to legal zoom or just using my cousin, who’s a divorce attorney, he can whip up these papers.

Anthony Vicino: [00:04:43] I am telling you you are going to get burnt so badly at some point. It’s not even funny. Do not cut this corner, guys. This is so important to protect yourself and your limited partners. Do the pay up. Pay the extra money. It’s worth it. Trust me, because listen, everything is fine when things are going fine. But as soon as things go wrong, everybody starts getting litigious. People want their money back. They’re going to go to the legal docs. And if those can’t hold up, if they’re not structured in a way that’s, you know, fair and equitable and legal for everybody, you’re going to be in a lot of trouble. This one they don’t get enough love is the CPA now a good CPA is just like a lawyer. They’re going to save you more money than they cost you. Now, finding a CPA is a good, great real estate CPA is a little bit like finding a needle in a haystack, like a really dry, not super exciting haystack. But you got to do it because if you can find the right one, they’re going to be so invaluable in helping you figure out ways that you can avoid that biggest expense that we all inevitably have to pay, which is taxes. So do yourself a favor. Go find a CPA, preferably somebody who really specializes inside of real estate syndication so that they understand all the nuances of this vehicle can help maximize your your savings.

Anthony Vicino: [00:06:00] If you’re curious if you’re looking for some referrals on some great CPAs or lawyers or anybody else on the team that you need, reach out, I’d love to connect you. We know some people I’m not a CPA or a tax or legal person, so I’m not going to do it for you. But I know some people they’re pretty good. So that’s that’s it. Those are the seven team members that you need to have on your syndication team. You got your general partners, you got your limited partners, you’ve got a broker, you’ve got a lender, you’ve got your property management, you’ve got your attorney and you’ve got your CPA. All of these people are invaluable. You can’t cut out any of one, any one of them. Otherwise, the engine just collapses. It doesn’t work anymore. So as you’re building out your team, whether you’re a general partner or your limited partner and trying to understand who’s on the general partner’s team, these are the roles that you’re going to be looking for. So hopefully this brought you a little bit of value. If it did do me a favor, go share it with a friend or an enemy. Honestly, I don’t care. Go share. Sharing is caring, so I appreciate you guys taking a little bit of time out of your day. We’ll see in the next video.

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