Do You Have to Be an Expert?

I used to think you had to be a real estate expert to invest in large multifamily deals such as apartments or mobile home parks - I was dead wrong. In fact, the overwhelming majority of people who invest in large multifamily / apartment deals aren’t real estate experts at all and many don’t even own a single rental property.

How is that possible?

Ok, when you think about investing in a multifamily syndication, you should think about 2 categories of people:

- General Partners (GPs) (You definitely still need a few experts on the team - and that’s who these guys are). They do all the hard stuff like finding the deals, crunching the numbers, working with banks, tearing down stuff, building nicer stuff…you get it.

But the other category of people in these deals is…

- Limited Partners (LPs)

These are regular people - not real estate experts. Bankers, accountants, doctors, salesmen, factory workers, and anyone else who has extra money to invest…

Most deals will only have a handful of GPs (experts) on the team - maybe 3 or 4. Meanwhile, depending on the size of the deal, there could be 10, 20, 50, or even more LPs! Being part of these huge deals is a team sport and everyone is necessary. The “experts” (GPs) will bring their expertise and invest massive amounts of time to execute the business plan, the “non-experts” (LPs) typically just invest their $$ and then sit back and collect checks.

So if you aren’t a real estate expert, don’t have a ton of extra time, but want to get in on the upside of these deals, participating as an LP in a multifamily syndication might be exactly what you are looking for.