Apartment syndications are one way to substantially diversify your real estate portfolio and access the immense benefits that commercial real estate ownership can provide. It allows you to hold different assets in your portfolio without having to be on-site or hyper-familiar with the particular location of the investment. However, most people still do not understand how it works.
In this episode, Jonathan Tonks joins us on a deep-dive into the syndication model — its benefits and how it helped him aid more people from a financial standpoint.
Here are some power takeaways from today’s conversation:
- Geographic diversification is important in building a strong asset portfolio.
- Relationship building is critical for scaling.
- Stay involved with your partners throughout the entire syndication process.
- Operate with a service mentality.
Episode Highlights:
[11:11] Jonathan’s Investing Strategy
His early mentality was to look at 20 to 50 assets available in his local market. However, his mentors taught him to aim for better growth markets and opportunities. This means buying higher price points and diversifying geographically.
[13:28] Defining Syndication
Syndication is an incredible way to gain substantial wealth and exposure to real estate. Simply said, syndication is partnering with individuals to purchase and acquire an asset that is not necessarily real estate.
[17:25] Why You Need to Diversify
If all your assets are centered in one city, you will be capped by the limits of that city. This is why it’s important to have assets in different areas. And this is where the syndication model comes in handy.
[19:22] Two Types of Partners
The syndication model has an active partnership team and a passive partnership team. The active group or the general partners (GPs) consists of everyone who is part of the acquisition. The passive group or limited partners (LPs) consists of the people who are contributing equity capital to help close the properties.
[26:21] Jonathan’s Underlying Mindset in Syndication
Jonathan believes in the service mentality. He wants to introduce syndication to people because he knows it can change both lives from a wealth perspective. It is less of the money aspect and more of building a relationship with his partners in the long term.
Notable Quotes:
[8:32] “Get your money working at a good number and continue to do that because over time that's going to build wealth. That's how you obtain that substantial number.”
[8:54] “If it’s getting you in a better position than you otherwise would have been in, that’s a good house hack. That’s a good investment.”
[31:09] “That's how I sort of approach everything every day: service abundance. And from there, we can all win. Right? There's no zero-sum game.”
Resources Mentioned:
Rich Dad, Poor Dad by Robert Kiyosaki
The Complete Guide to Buying and Selling Apartment Buildings by Steve Berges
Reach out to Jeremy on LinkedIn and Instagram
Connect with Jonathan on LinkedIn and @provisionspace