Property Syndication Groups, which have been around for many years are attracting attention again.  As a property educator and investor with 20 years experience in the United States, Australia and United Kingdom, I have found property syndicate investors often are unhappy with their results based on the funds they have outlaid.

When it comes to property many people want to go fishing but want the fish caught, prepared, cooked and put on the plate in front of them and for that, they are prepared to pay a substantial amount of money to have it done by someone else.

When working with a property syndicate ask yourself three questions: How much are you as an investor prepared to pay for the service they provide?  How risky is this opportunity? When will you realize your profit?

Quite often people put their money into syndicates to get instant results and of course  end up paying more than retail for the properties they purchased simply because they didn’t take the time to educate themselves about what they were investing in.

I recommend that you research the background of any property syndicate company including the directors. Ask the directors this question: show me the money in your bank account that you have received as a result of investing in property.

With property syndicates you’re putting your own hard earned cash on the table, while they are not investing any of their own money. There is a big physiological difference between people investing their own money versus using other people’s money.

Though I have never invested in a property syndicate, over the years when I have been partners in property joint ventures, I found when my joint venture partner used all of my money and none of their own money, the end result was the transaction was not a profitable as originally promised.   Yet with transactions when the other joint venture partner invested their own money also, the profit was equal or surpassed the original estimate.

Because most syndication groups don’t invest their own money, this means your real estate investment is at risk. If the syndicate falls apart and goes bankrupt, it doesn’t matter to them because it wasn’t their investment or “their life on the line” so to speak.

My recommendation is be an active participant in real estate investing. Get some knowledge, pick a place and start. That way whether you are an active or passive property investor you are making your decisions from an informed place-be in the game not on the sidelines!

Have you had experience with any groups like these? Post your comments below!

Rick