How to Find Real Estate Syndications to Invest In
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Accredited investors usually find real estate syndications through relationships rather than search results. The main sources are sponsors you already know or whose work you follow, introductions from investors who have put money with a sponsor, the sponsor's own email list or investor page, and investor events. The offering rules explain why: under Rule 506(b), a sponsor may offer a live deal only to people it already has a substantive relationship with, so those deals are never advertised and you hear about them only after you get to know the sponsor. Under Rule 506(c), a sponsor may advertise a live deal publicly, but every investor must be verified as accredited before investing. Wherever a deal comes from, screen the sponsor first, then the plan, the debt and the terms. Treat unsolicited offers, guaranteed returns and pressure to wire quickly as warning signs.
This guide covers where to look, how the rules shape what you see and how to screen what you find. If you are new to these investments, start with apartment syndication for beginners.
Where investors find syndications
| Source | How it works | What to watch |
|---|---|---|
| Sponsors you already know | Friends, colleagues or local operators who sponsor deals | Familiarity is not diligence; review the documents anyway |
| Sponsors whose work you follow | Real estate educators, podcasters and writers who also sponsor deals | Separate their teaching from their deal; check their actual track record |
| Introductions from other investors | People who have invested with a sponsor | Ask what went wrong as well as right |
| The sponsor's own list or investor page | You subscribe and get notified when a deal opens | Sign up early to avoid rushed decisions |
| Investor events and meetups | You meet sponsors in person | A live deal pitched to strangers must be a 506(c) offering |
| Public posts and ads (506(c) only) | A live deal advertised to anyone, with verification | Verification is required; advertised deals are not pre-approved by anyone |
How 506(b) and 506(c) change what you see
| Topic | Rule 506(b) | Rule 506(c) |
|---|---|---|
| Can the sponsor advertise the live deal? | No | Yes |
| How you hear about it | Through an existing relationship | Publicly or through a relationship |
| Who can invest | Accredited, plus up to 35 non-accredited sophisticated investors | Accredited only |
| Proof of accredited status | Usually a questionnaire | The sponsor takes reasonable steps to verify |
See 506(b) vs 506(c) and what is a 506(c) offering.
How to screen what you find
- The sponsor first. Track record, how they handled a difficult year, how they report, and any regulatory history. See sponsor track record, reference check a sponsor and research a sponsor on EDGAR and BrokerCheck.
- The deal. Business plan, market, loan terms, reserves and the projections behind the returns. See how to vet a syndication.
- The terms. Fees, preferred return, profit split, voting rights and transfer limits. See questions to ask a sponsor.
- Your fit. How much to put in and how it fits with the rest of your savings. See how much to invest.
Warning signs
- An unsolicited offer from someone you do not know about a 506(b) deal.
- Guaranteed or "risk-free" returns.
- Pressure to commit or wire within hours.
- Wire instructions sent by email, or changed at the last minute. See wire fraud in syndications.
- No offering documents, or a sponsor who will not answer questions in writing.
How DoorRaise fits in
On DoorRaise, sponsors of apartment buildings with 5 or more units have a sponsor page you can subscribe to, and each deal has a deal page with the property, the plan, the loan and the offering documents. Investors must be accredited, U.S. persons who provide a Form W-9 and pass identity and sanctions screening. Escrow is at Enterprise Bank & Trust, an FDIC-insured bank, and investors fund by wire only. DoorRaise is not a law firm, broker-dealer, investment adviser, funding portal or bank, and does not recommend any investment.
Raise your apartment deal from the people who already follow you.
DoorRaise is built for apartment buildings with 5 or more units: one link for the deal, escrow until closing and a standard fee card.
Ready to raise? Create your free sponsor page or see pricing.
FAQ
Why can't I find many syndications through search?
Many are 506(b) offerings, which cannot be advertised. You learn about them by getting to know sponsors before a deal launches.
Is a deal I saw in an ad safer because it is public?
No. A public 506(c) deal is not reviewed or approved by the SEC or any state. Screen it the same way as any other.
How long before a deal should I get to know a sponsor?
For a 506(b) deal, the relationship must exist before the offering. Getting on a sponsor's list early also gives you time to review their past reporting.
What should I ask for first?
The offering documents, the sponsor's track record with results by deal, and references from investors in past deals.
Next step: go through your first syndication investment checklist.
Sources
- 17 CFR 230.506, Rule 506 exemptions
- 17 CFR 230.502(c), limits on general solicitation
- SEC Investor.gov, Private placements
This article is general information, not investment or legal advice. Every investment can lose money. Read each deal's offering documents and talk to your own advisers. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.