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There are many key components to consider when investing in real estate, whether you’re a real estate entrepreneur or a seasoned syndicator. Joel Fine, managing partner at Lakeline Properties in Austin, TX, shared his insights with us on The Deal Makers podcast about his career pivot from software engineering in Silicon Valley to becoming a full-time real estate investor, syndicator, and land developer.
He emphasizes the accessibility of the syndication model, the transition between being a passive syndicator to an active sponsor, the basic components to a successful career in real estate investing, recommendations for both entrepreneurs and seasoned investors, and his general bias towards taking action.
By following these steps, you can work your way towards a successful career in real estate investing and syndication.
Real estate syndication is a great way to explore the real estate industry without immediately becoming a full-fledged investor.
If you’re new to real estate investing or are looking to explore investment opportunities, here is a brief overview of real estate syndication that will help you with your career down the line: A real estate syndication is when a group of investors pools their capital to jointly purchase a real estate property under the management of a general partner.
There are normally two parties involved in a real estate syndication: the syndicator(s) and the passive investors. The syndicator, or GP, is responsible for most of the duties related to the syndication.
Passive investors provide portions of the capital needed to acquire the property, and in exchange, they receive ownership shares of the property and/or returns on investment paid by the syndicator on a periodical basis.
Joel Fine is a big proponent of the syndication model and sees it as “a great way to scale up and really do more impactful things in the real estate business.”
Fine began his real estate journey as a passive investor while still working in tech; he invested with other syndicators on 200-300 unit apartment complexes who used third-party property managers, and “invested with them passively” as his “first foray into the commercial real estate world and to syndication.” He leveraged this experience as a learning opportunity to understand the operational details of managing properties and assets.
Once your foundation is strong on passive investments, you can start shifting to becoming a sponsor on deals. A sponsor, or syndicator, handles the execution of the business plan and delivers strong returns to the passive investors in the real estate syndication.
Joel Fine continued his career as a passive investor even as he shifted to becoming a sponsor on deals to round out his education, strengthen his investment strategy, and understand the business even better.
Fine’s career journey exemplifies how you can leverage the opportunities that passive investing provides you to eventually transition into becoming a full-time sponsor on real estate investment deals.
Networking is a skill necessary in all industries and professions – it introduces you to new business opportunities, helps expand your business, and also helps you further develop your knowledge on topics previously foreign to you.
Psychological research also promotes the idea that networking behaviors are essential to career success, such as attending conferences or grabbing drinks to discuss business matters informally. In real estate, networking is especially important because you need to find potential investors, deals, or partners, establish trust with the people that you’re working with, and build a diverse community, which will give your business a better chance of growing.
Some ways to build a community as a real estate investor are to join networking groups and attend conferences. Joel Fine utilized the power of networking to consistently expand his knowledge, and partnerships, and establish himself as a thought leader in the community.
“I’m constantly meeting new people, networking with folks who I could potentially partner up with in many different ways,” Fine says. He built his own community by establishing a monthly meetup focused on multifamily investing and education:
“I provide myself an opportunity to meet a lot of new people, a lot of people who are already favorably inclined towards real estate, but as a host, I’ve established myself as a leader and as a thought leader in that area, in that part of the business. So people look at me and they think of somebody who understands syndication, understands real estate, and that’s been a very, very powerful accelerant to the relationship.”
Fine’s monthly meetup is an example of how building community within the industry helps establish your reputation as an expert within the community and as a real estate professional.
Whether you’re new to the industry, or an experienced investor, building community through a monthly meetup is an efficient way to grow your network and establish a positive reputation surrounding your real estate, investment, and syndication expertise.
While understanding the syndication model and the power of networking are extremely important aspects of building a career in syndication, there are a few concrete recommendations that investors and entrepreneurs alike could utilize. First, it’s important that you invest in software that’s built specifically for real estate, a Capital Relationship Manager (CRM) is a great example.
The CRM you choose will become an important part of your daily work, as it will automate processes and make your work day and sales outreach more efficient. Joel fine validates the importance of CRM in real estate; he said that CRM “is really important in the world of syndication, because one of the constraints, when you’re running a syndication, is you have to have a substantive relationship with somebody before they can invest in one of your deals.” Fine considers CRM one of the most valuable tools as a real estate investor in order to document the progression of the relationship between the syndicator and the investor.
Another important tool to invest in as a syndicator is a real estate investor portal. Investor portals allow you to streamline your lead management, automate your workflow, store investor profiles and transaction details swiftly, make electronic payments, and more. Fine notes the importance of an investor portal as a powerful tool to keep track of investments in a way that your investors can get visibility. “They can log in and see what’s happening,” Fine says, “I can use that to communicate with my investors and share financial metrics and so forth.” If you want to streamline your processes as a syndicator, it is definitely worthwhile to invest in an accessible, easy-to-use investor portal.
While understanding the fundamentals of investing, networking, and suitable software will help you build a successful career as a syndicator, an underlying principle for all of these elements to success is the importance of taking action.
Joel Fine highlights his bias towards taking action: he carries a “general attitude of ready, fire, aim.” While you can ground yourself in proper education and understand the different sides of the business, you must utilize your ability to connect with others and tackle projects together.
You must sense the right opportunities and find the right people to work with. Only then will your expertise and technical tools help you succeed in your career.
Asaf is Agora’s Head of Marketing and a growth expert providing consulting services to tech startups and VCs. Asaf is also the host of The Deal Makers Podcast, where he hosts top CRE talents for conversations where they share their success stories and industry insights.