Information To Purchase Commercial Property Investment Syndicates Will Fund
What Is A Real Estate Syndicate?
Let’s start with the basics for those who are intrigued. A “Real Estate Syndicate” is an organized group of investors who pool their resources (i.e. capital, labor) and combine to invest in properties that are far larger than what they could afford individually.
They’re able to provide LTC (loan to cash) commercial funding for clients and promote the process, so both sides earn money and see a positive ROI.
Who are the big players when it pertains to real estate syndicates? Here are the top 10.
1) Credit Suisse
2) M&T Bank
3) PNC Real Estate
4) BBVA Compass
6) Byline Bank
8) Otera Capital
9) Bank of America
10) H.I.G Capital
When investing and purchasing commercial property, investment syndicates can provide funding and know they made the right decision. These are the top syndicates in the USA and will provide ample funding for the right clients.
Contacting A Syndicate
Let’s assume it’s time to go up to a real estate syndicate, where does the process begin?
Most of these institutions will have methods for setting up meetings with the true representatives. Contact these establishments and set up a time and date to meet. Appointments ensure the loan process gets started on the right foot and gain the appropriate results.
It is important to become prepared before doing this regardless of how efficient you feel the pitch is going to be.
Presenting Executive Summary
Now, let’s focus on the executive summary as it plays an important role when sitting down with a real estate syndicate. It is important to have all of the essential features present in the executive summary to pass all of their tests.
What does an excellent Executive Summary possess? Let’s take a look.
1) Establish The Core Aspects (Location, Cost)
2) Emphasize Opportunity For Growth
3) Demonstrate Competitive Advantage
4) Create Your Model For Revenue Generation
5) Set Minimum Milestone With Equity
6) Avoid Generalized Statements Without Proofs
7) Ignore Purple Prose (i.e. flowery adjectives written to sound intellectual)
8) Remain Concise
An excellent executive summary should shape up to look like before meeting with the syndicate. For those who are looking for an LOI (letter of intent), this will come through after appropriate vetting is complete. Another important factor is for those syndicates that want to ensure they’ve exhausted all options before issuing an LOI.
Some will be faster, while others will take their time.
Information On Funding
For the loan, the rates will vary depending on the risk being taken by the syndicate. In general, syndicated loans end up around 7.9% based on the average of all funding provided in recent years. This percentage is just an overall mark to aim for, and for some loans lower rates are acquirable.
An unyielding executive summary can have a profound impact.
What about the project itself? When it comes to commercial properties, it’s best to have a good return on the investment so that both parties can make a good amount of money.
The bare minimum is 7.9% as the loan itself will be set at this rate. In general, a safe return should be anything over 15-30% depending on the location and property. Some can get a lot more out of the investment.
Length Of Process
How long does all of this take? The funding will have to be approved and sent through, which will take around 2-3 weeks from start to finish. Once again, various factors do play a role in this.
The costs for an investor will include preparing the research, tax implications, and potential contractual requirements (i.e. legal representation) to ensure things are okay.
To purchase commercial property investment syndicates will fund, it begins with this information.