Real Estate Syndication: How to Syndicate an Apartment Deal, Step by Step

A real estate syndication is a group investment. A sponsor finds the property, arranges the loan and runs the business plan, and passive investors put in most of the equity, usually through an LLC. Because the sponsor is selling ownership interests to investors, a syndication is a securities offering, so most rely on Rule 506(b) or 506(c) of Regulation D. Here's how to syndicate an apartment deal from contract to closing.

What is a real estate syndication?

It's a partnership between one active party and many passive ones. The sponsor brings the deal, the work and usually some capital. Investors bring most of the equity. Both own the property through one entity, usually an LLC created for that single building.

Multifamily syndication, buying apartment buildings with 5 or more units, is one of the most common types, and apartment buildings can be financed with agency loans from Fannie Mae and Freddie Mac.

Why is a syndication a securities offering?

When you sell passive interests in a deal you run, you're selling securities, so you need to register the offering or use an exemption. Almost every small sponsor uses Regulation D:

• Rule 506(b) bans general solicitation. You raise from people you already know, and you can include up to 35 non-accredited but sophisticated investors in any 90 days.
• Rule 506(c) lets you market publicly, including on social media, but every investor must be accredited and you must verify it.

We compare them in detail in 506(b) vs. 506(c).

How to syndicate an apartment deal in 9 steps

1. Put the property under contract. Your purchase contract sets the clock: due diligence, financing and closing deadlines.
2. Build the team. You'll need a securities attorney, a lender or mortgage broker, a CPA for K-1s and, if you're new, an experienced operator as co-sponsor.
3. Choose your exemption. 506(b) if you'll raise quietly from people you know; 506(c) if you'll market publicly.
4. Form the entity and draft documents. Most deals use an LLC with an operating agreement, a private placement memorandum (PPM) and a subscription agreement. See what a PPM includes and costs.
5. Set the terms. Minimum investment, preferred return, profit split and every fee. See syndication fees and the preferred return.
6. Market the deal and verify investors. Under 506(c), verify each investor is accredited before they invest. See accredited investor verification.
7. Collect signatures and funds. Investors sign the subscription documents and wire their money. Where that money sits until closing is one of your biggest decisions.
8. File Form D. File with the SEC within 15 days after the first investor is committed, plus any state notice filings. See Form D filing for a syndication.
9. Close and operate. Fund the purchase at closing, then run the property, send distributions and deliver K-1s each year.

What does it cost to syndicate a deal?

Legal work is the biggest upfront cost. Syndication Attorneys, PLLC says a complete Regulation D package with a PPM "typically ranges in price from $15,000 to $30,000." PPM Lawyers puts specialist firms at $12,000 to $25,000 in 2026 and big firms at $50,000 to $75,000 or more. Add state notice fees, accreditation checks, investor software and K-1 preparation.

What does the sponsor earn?

Sponsors usually earn an acquisition fee at closing, an asset management fee while they hold the property, and a share of profits above the investors' preferred return. Industry sources commonly cite 1% to 3% for acquisition fees and 70/30 or 80/20 profit splits. The numbers vary deal to deal, so investors should see every fee in dollars before they invest.

What mistakes sink first-time syndicators?

• Paying capital raisers per dollar raised. Pay tied to money raised is a hallmark of broker activity, and unregistered brokers can put your whole raise at risk. See how creators and capital raisers can be paid.
• Promising returns in posts. Social media posts about a live deal are offering material. Avoid "guaranteed" or projected returns outside your documents. See raising money on social media.
• Taking investor money into your own account. In the Nightingale case, investor money went into an account the sponsor controlled instead of escrow. The Justice Department says CEO Elie Schwartz diverted substantially all of it. He was sentenced to 87 months in May 2025.
• Skipping verification. Under 506(c), a checked box isn't verification.

How DoorRaise helps you syndicate

DoorRaise gives apartment sponsors and creators one link for their deal. Investors verify, sign and invest into escrow, and the money reaches the title company at closing or goes back to them.

• For sponsors: we form the LLC, generate offering documents from attorney-approved templates, verify your investors, file Form D and handle distributions and K-1s.
• For investors: every deal page will show the same fee card, the sponsor's track record checked against closing statements, including losses, and exactly what we checked.
• Pricing: $7,500 per deal for raises up to $5 million ($12,500 above that, including state filings in up to 10 states), $300 per investor a year and $95 per accreditation check. The deal pays these fees at closing, and we take 0% of your raise.

FAQ

What is a real estate syndication?

A group investment where a sponsor finds and runs a property and passive investors supply most of the equity through a shared entity, usually an LLC.

How much money do you need to syndicate a deal?

You need enough for earnest money, inspections, loan costs and legal fees before closing, plus any equity you plan to invest. Offering documents alone often run $15,000 to $30,000 from a specialist law firm.

Is real estate syndication legal?

Yes, when the offering is registered or exempt. Most syndications use Rule 506(b) or 506(c) of Regulation D and file Form D with the SEC.

Can non-accredited investors join a syndication?

Under Rule 506, only 506(b) allows them: up to 35 non-accredited investors in any 90 days, each financially sophisticated on their own or with a purchaser representative, and extra disclosure is required. A 506(c) offering is accredited-only. Rule 504 also allows them, but it caps the raise at $10 million in 12 months and doesn't replace state registration. To raise from anyone, sponsors can use Regulation Crowdfunding or Regulation A. Both cost more, for a funding portal (Reg CF) or SEC qualification (Reg A), and Reg CF and Reg A Tier 2 limit how much non-accredited investors can put in.

What's the difference between a syndication and a fund?

A syndication usually raises money for one specific property. A fund raises a pool first and buys properties later, so investors trust the sponsor's choices instead of judging a single deal.

Sources

• SEC, Regulation D offering statistics
• SEC, Rule 506(b)
• SEC, Rule 506(c)
• SEC, Filing and amending a Form D notice
• Syndication Attorneys, PLLC, private placement memorandums
• PPM Lawyers, Reg D PPM cost
• BiggerPockets, common syndication fees
• SEC staff letter on transaction-based compensation (2010)
• U.S. Department of Justice, Nightingale sentencing
• IRS, partnerships and Schedule K-1
• DoorRaise, how it works and pricing

This post is general information, not legal, tax or investment advice. DoorRaise is not a broker-dealer, investment adviser or funding portal and does not recommend any offering.