Real Estate Syndication is a method of pooling money from investors to purchase, invest in, develop or reposition a large real estate project. The project can run into several million dollars plus & is prohibitive for a single investor to manage on their own from an investment, management & expertise perspective.
A syndicator, or a sponsor, is often a general partner or a general partnership that is responsible for putting the entire project together. Real Estate is a team sport and requires expertise of various skill set: lending, financial analysis, underwriting, asset management, project management, capital raising, accounting, taxation, local zoning, market & research analysis, legal, rehabbing & construction management.
It is not uncommon to see several sponsors working together to set up real estate syndications, manage operations & reporting, communicate with investors, source financing, raise money, educate investors & make day to day decisions including when to sell a project.
General partners are responsible for overall project management and day to day operations. Limited Partners are passive investors & owners without any involvement or decision making in the real estate syndicated project. Their primary role is to provide capital for the project.