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  • Writer's pictureHammer & Hampel

Investing in a Multifamily Syndication

What is a Multifamily Syndication?

A multifamily syndication refers to a business structure where a group of investors pool their financial resources and expertise to collectively purchase and manage a multifamily property. It is a popular investment strategy in the real estate industry, especially for larger commercial properties such as apartment buildings or complexes. In a multifamily syndication, the investors form a syndicate or partnership, typically led by a syndicator or a lead investor who takes the responsibility of finding and analyzing investment opportunities, structuring the deal, and managing the property. The syndicator often has extensive experience in real estate and acts as the main point of contact for the other investors. At Hammer and Hampel, Morgan and Dan act as partners in the process of finding and analyzing investment opportunities, structuring the deal, and managing the property.

Multifamily syndications allow individual investors, like you, to access larger-scale real estate investments that they might not be able to undertake individually. It provides diversification, professional management, and the potential for attractive returns. It is important for investors to carefully evaluate the syndicator's experience, track record, investment strategy, and the specific terms of the syndication agreement before participating in a multifamily syndication. At Hammer and Hampel, we begin every relationship being as interested in you as an investor as you are about us as your sponsors.

What are the benefits of investing in multifamily syndication?

Investing in multifamily syndication offers several benefits for investors. Here are some key advantages:

1. Access to Larger Scale Investments: Multifamily syndication allows individual investors to participate in larger real estate deals that they may not be able to undertake on their own. By pooling their resources with other investors, they can collectively invest in larger multifamily properties, such as apartment complexes or residential communities.

2. Diversification: Investing in multifamily syndication provides an opportunity to diversify one's real estate portfolio. Instead of investing in a single property, investors can spread their capital across multiple tenant properties and portfolio deals that encompass more than one property. This means that the risk adjustment is across the tenant base vice a SFH which is either 100% occupied or 100% vacant.

3. Professional Management: Multifamily syndications are typically led by experienced syndicators, like Morgan and Dan, who have a track record in real estate investing and property management. Through our third-party property management partners, we oversee the care of day-to-day property management tasks, such as tenant management, maintenance, and financial reporting. This allows investors to be more passive in their investment and rely on the expertise of us as the syndicator.

4. Shared Expertise and Resources: Investing in a syndicate brings together investors with different skills and expertise. With over 112 investors at Hammer and Hampel, this collaborative approach allows our investors to leverage each other's knowledge and experience, leading to better decision-making and potential risk mitigation.

5. Potential for Appreciation and Returns: At Hammer and Hampel, our multifamily syndications offer the potential for both property appreciation and increased returns over time. As the syndicate implements value-add strategies, improves property operations, and benefits from market appreciation, the property's value may increase. When the property is sold or refinanced, investors can receive their share of the profits, which can include both the appreciation and the cash flow earned during the holding period.

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