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A Sample Real Estate Syndication Business Plan Template

Are you about starting a real estate syndication company? If YES, here is a complete sample real estate syndication business plan template & feasibility report you can use for FREE.

Okay, so we have considered all the requirements for starting a real estate syndication business. We also took it further by analyzing and drafting a sample real estate syndication marketing plan template backed up by actionable guerrilla marketing ideas for real estate syndication businesses. So let’s proceed to the business planning section.

Why Start a Real Estate Syndication Business?

Real estate syndication builds, sells, buys, and operates real estate investments. The legal structure for real estate syndication is corporations, limited liability companies, and full or limited partnerships. A real estate syndicate can be easily described as the pooling of money from many investors and spending this money as a whole into real estate projects.

These funds we believe can be used as an equity investment to a real estate project in combination with a commercial loan secured by a mortgage or trust deed to fund the bulk of the cost and development of the project. Investing in a real estate syndicate is essentially investing in a commercial real estate venture.

Starting or rather investing in a real estate syndicate needs due diligence in understanding the pros and cons of the potential investment. There are no promises that the venture will be profitable. This is one of the reasons why it is highly advised that people thinking of investing in real estate syndication should conduct an extensive background search of the individuals involved in kick starting the project, and you should also talk with your financial advisors as to the benefits of the investment and inherent risks.

It is also important to note that the importance of investing in real estate syndication is that a person can end up owning a small percentage in the real property being offered without having to be involved in the day-to-day management of the project.

If you think this is the kind of biasness you would like to dabble into, fine. Here is a sample business plan to guide you;

A Sample Real Estate Syndication Business Plan Template

  • Business Overview

Public real estate partnerships alone has leaped from $1.3 billion in 1981 to $4.7 billion last year, and we estimate that the Private syndications will total anywhere from 4 to 10 times that much. In the United States, the largest two syndicators alone — Balcor/American Express Inc. and JMB Realty Corp. — each raised more than half a billion dollars in real estate money last year.

The economics of this real Estate syndication business is rather too simple. Selling an income-producing property generates cash for the developer or owner — even if, as often happens, the owner then change around and leases the property back.

Buying into a property gives investors the tax advantages of depreciation and mortgage-interest deductions, along with an income stream from rents and a chance for profits when the property is sold. Assembling and marketing the deal lets the syndicator take a healthy cut of the whole transaction.

The real estate market has been very attractive in recent years because of the Economic Recovery Tax Act of 198 1, which allows owners to depreciate a property for tax purposes over only 15 years, considerably faster than before. This tax change, coupled with the inflation-beating appreciation of a lot of real estate during the last decade, laid the groundwork for a rapidly expanding industry.

It is a known fact that such fast growth has attracted a lot of people with more enthusiasm than experience, and with more interest in a quick profit for themselves than in a longer-term profit for their investors?

Most of the problems of real estate syndication as an investment circles around three issues. Fees are too high, the critics charge, and some of the costs are frequently hidden from prospective investors. Most partnerships are unduly risky, both as money-makers and as tax shelters.

And none of the partnerships are easy to get out of should your circumstances or your investment needs change. Since there is some truth to all these charges, it is worth knowing in advance where the problems may lie.

Real Estate Syndication Business Plan – Executive Summary

Universal Estates is a new real Estate syndication business that will operate within the City of Las Vegas, Nevada. Our real estate syndication business will be offering a unique service to property investors, homeowners, and tenants. Universal Estates will be registered as a limited liability company (LLC) within the state of Nevada, and will at all time stand by all city and state business laws.

Dr Frederick Tony will share ownership with the parent company, Integra Investments of the United Kingdom. Our plan at Universal Estates is to extend the parent company’s success to America by giving superior real estate service, quality structures, and competitively priced properties.

We at Universal Estates hope to initiate a two-phase program in order to make our business model a reality. Our first phase will include setting up the business. We believe it will include locating office space, employing an accountant/administrator to help with client calls, general office work, and accounting. Dr Frederick Tony will also build a phone, Internet, and power service to the new location.

We also know that he will purchase computers, printers, software, and office furniture to support daily business activities. Our second phase at Universal Estates will include establishing long-term relationships. Since the industry resides in a people-oriented market, our focus at Universal Estates will be to always exceed our customer’s expectations through trust, integrity, and mutual respect.

We believe that these relationships will be formed through networking and focusing on real estate brokers, mortgage lenders, property management companies, real estate attorneys, insurance agents, appraisers, and property inspectors. We understand that these companies will be at the heart of what Universal Estates will need in order to meet both renter and investor demand in the industry.

  • Our Products and Services

Our primary service at Universal Estates will be the buying and selling of investment properties. We believe that our venture will work very hard to locate properties that have a good valuation, require little repairs, and are in growing neighbourhoods. Once a property has been purchased, we at Universal Estates plan to hold onto the property until the valuation increases by eight percent.

We believe that this will make sure that the properties are sold and sizeable return is received. We at Universal Estates hopes to generate a minimum eight percent return on each investment property or $350k on each one million dollars. We also believe that we will be in charge of the legal tax, title work, insurance, escrow, and other requirements associated with the sale of a property.

Also for the properties bought but not yet sold, Universal Estates will make available property management service that will be made up of property maintenance and renter selection. We at Universal Estates hope to employ a property manager to manage each property before it has reached a set valuation. We believe that our property manager will work hand in hand with the property and make sure that all renters have met specific guidelines with respect to renter requirements that we must have established.

Also, we hope and believe that Property investors will be the last stage of income. We at Universal Estates hope to receive ten percent commission for finding an available property that has not been listed on any of the current property listing websites.

We at Universal Estates hope to make use of the low level of businesses offering the exact services we hope to offer as a key advantage. Dr Frederick Tony hopes that property investors will reach out to Universal Estates once word-of-mouth has spread throughout the industry.

  • Our Vision Statement

Our vision at Universal Estates is to become the number one real estate syndication business that best understands and satisfies all real estate needs of our clients in the United States of America and Foreign Investors.

  • Our Mission Statement

Our mission at Universal Estates is to establish a business model that keeps customers first with high quality and valuable properties. Providing astounding superior service will be the core value of Universal Estates, which will be communicated to every client. We believe that this will help provide a steady stream of operating and passive investment income through rental and seller properties.

  • Our Business Structure

We hope to kick start Universal Estates as a small business owned and run by Dr Frederick Tony. Dr Frederick Tony is a seasoned and a well trained real estate professional who will work hard to provide the very best in real estate development services. It is very important to note that Dr Frederick Tony will serve as a single owner and employee of Universal Estates.

We also hope to include an office manager/accountant to help with customer calls and overall service. But as the business begins to grow, we will then employ a small staff to help with showing properties for rent or sale. We will also employ a marketing team that will aid us by reaching out to property investors with properties at a value.

It is very important that we include that Dr Frederick Tony received his Bachelor’s degree in Business Administration from University of Washington before attending David Lindahl’s educational seminars to further his education in commercial real estate investing. He went further by receiving his MSc from the Neapolis University in Cyprus and his PhD from HaasSchool of business, all in the real estate field.

Since after his studies, the young Dr Frederick Tony has worked for a real estate firm in California before accepting a real estate agent position with Alfred Marshall business in 2005. After his AMB employment, Dr Frederick Tony accepted a position with Integra investments.

To make things easier and well noted, outlined below are the various portfolios we hope to employ at Universal Estates;

  • Chief Executive Officer
  • Project Manager
  • Company’s accountant
  • Admin and HR Manager
  • Head of Assets Management
  • Head of Acquisition and Disposition
  • Business Developer
  • Sales and Marketing Executive
  • Front Desk Officer

Roles and Responsibilities

Chief Executive Officer

  • In charge of providing direction for the business
  • Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
  • In charge of the day to day running of the business
  • In charge of handling high profile clients and deals
  • In charge of fixing prices and signing business deals
  • In charge of signing checks and documents on behalf of the company
  • Evaluates the success of the organization
  • Reports to the board

Project Manager

  • In charge of the planning, management and coordinating all projects on behalf of the company
  • Supervises projects
  • Ensures compliance during project executions
  • Provides advice on the management of projects
  • In charge of carrying out risk assessment
  • Uses IT systems and software to keep track of people and progress of ongoing projects
  • In charge of overseeing the accounting, costing and billing of every project
  • Represents the organization’s interest at various stakeholders meetings
  • Ensures that project desired result is achieved, the most efficient resources are utilized and different interests involved are satisfied.

Company’s accountant

  • In charge of preparing financial reports, budgets, and financial statements for the organization
  • Provides managers with financial analyses, development budgets, and accounting reports; analyses financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
  • In charge of financial forecasting and risks analysis.
  • Performs cash management, general ledger accounting, and financial reporting for one or more properties.
  • In charge of developing and managing financial systems and policies
  • In charge of administering payrolls
  • Ensures compliance with taxation legislation
  • Handles all financial transactions for the company
  • Serves as internal auditor for the company

Admin and HR manager

  • In charge of overseeing the smooth running of HR and administrative tasks for the organization
  • Defines job positions for recruitment and managing interviewing process
  • Carries out staff induction for new team members
  • In charge of training, evaluation and assessment of employees
  • In charge of arranging travel, meetings and appointments
  • Oversees the smooth running of the daily office activities.

Head of Assets Management

  • Oversees the company’s portfolio of real estate assets (which are owned and managed) through acquisitions, dispositions, and day‐to‐day operations, including management of revenue and expense items; works to maximize the portfolio’s performance.
  • Provides strategic oversight of existing and potential real estate assets within a designated geographic area.
  • Takes care of business plans and budgets for properties.
  • Reviews the condition and maintenance of assigned properties; takes care of their bookkeeping and cash flow accounting; handles rent reconciliation; prepares property financial reports and annual budget forecasts.

Head of Acquisition and Disposition

  • Takes care of overall acquisitions and dispositions
  • Identifies and analyses acquisition opportunities; negotiates acquisitions.
  • In charge of identifying opportunities to acquire properties, possibly within a designated geographic region.
  • Assists in the sourcing and acquisition of property for development; conducts market research; contacts brokers and owners about property acquisition opportunities; assists in negotiations with sellers and other parties.
  • Identifies and analyses disposition opportunities; negotiates dispositions.
  • In charge of identifying opportunities to dispose of properties, possibly within a designated geographic region.
  • Assists in the disposition of property; conducts market research to determine the value of properties; contacts brokers and potential buyers; assists in structuring sales transactions and negotiations with buyers.

Business Developer

  • Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
  • Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
  • In charge of supervising implementation, advocate for the customer’s need s, and communicate with clients
  • Finds and qualifies land for development based on company’s land requirements; maintains a land search database; initiates discussions with property owners about the possible sale of property
  • Develops, executes and evaluates new plans for expanding increase sales
  • Documents all customer contact and information
  • Represents the company in strategic meetings
  • Help increase sales and growth for the company

Sales and Marketing Executive

  • Lists the property for sale to the public
  • Markets space; finds tenants; participates in lease negotiations.
  • Provides the seller with a real property condition disclosure (if required by law) and other necessary forms.
  • Prepares necessary papers describing the property for advertising, pamphlets, open houses, etc.
  • Holds an open house to show the property.
  • Serves as a contact available to answer any questions about the property and schedule showing appointments.
  • Ensures that buyers are pre-screened and financially qualified to buy the property. (Sellers should be aware that the underwriter for any real estate mortgage loan is the final say.)
  • Negotiates price on behalf of the sellers.
  • Acts as a fiduciary for the seller, which may include preparing a standard real estate purchase contract.

Front Desk Officer

  • Receives Visitors / clients on behalf of the organization
  • Receives parcels / documents for the company
  • Handles enquiries via e-mail and phone calls for the organization
  • Distributes mails in the organization
  • Handles any other duties as assigned my the line manager

Real Estate Syndication Business Plan – SWOT Analysis

Since the real estate business is a very lucrative business, it doesn’t mean that there are no challenges or barriers in the industry. Establishing a real estate syndication business has its own barriers, but you just need to be patient and understanding to be able to survive in the industry.

We at Universal Estates are very much ready to face all possible challenges, which is why we made sure that we conducted our SWOT Analysis. The SWOT analysis provides us at Universal Estates with a chance to examine the internal strengths and weaknesses for our Company.

It also allows our owner the chance to examine the opportunities available to the business as well as potential threats. The following outlines the company’s strengths, weaknesses, opportunities, and threats.

STRENGTHS

  • Experienced real estate investor
  • Clear understanding of the market and its direction
  • Several search avenues that will locate hidden opportunities
  • Available investment capital

WEAKNESSES

  • A new company
  • Thousands of competitors
  • Lack of awareness among investors

OPPORTUNITIES

  • Strong demand for rental units
  • A growing economy
  • Capitalize on hidden properties

THREATS

  • A growing number of competitors with a similar version of the Company’s software program
  • A slowing economy or double dip recession
  • Shirking property valuations

Real Estate Syndication Business Plan – MARKET ANALYSIS

  • Market Trend

It is indeed true that the real estate market is still suffering from a slow recovery; current businesses are still trying to make a profit. More than half of the industry new entrants are enthusiastic about their prospects for profitability. But as the recovery continues, real estate businesses will continue feeling enthusiastic about the growing opportunities for profit.

It is very important to note that capital will continues to flow more freely in the market. Individuals are seriously looking for new opportunities to invest their funds. Some likely sources of capital include insurance companies, banks, wealthy investors, and real estate investment trusts. These sources of capital are looking to differentiate their portfolios with unique investments.

Also, ventures in the real estate syndication sector are beginning to notice the differing trends among the new generation of consumers. These young consumers are more likely to live in cities than suburban areas, and are always looking to limit their commutes. This new generation of consumers is believed to have a huge effect on the real estate market in cities.

  • Our Target Market

We at Universal Estates hope to target three groups. The very first group is made up of those people or families looking for rental accommodations. We believe that this group are searching for rental vacancies because9f the change in their employment or some other event that has moved to the changed location.

We at Universal Estates believe that homeowners are still finding it difficult to maintain their mortgage payments and other living expenses even after years of industry collapse and recovery. We believe it will be hard to characterize any specific tenant that will occupy our properties. But we hope to implement strict tenant quality and credit review procedures to make sure that the firm’s revenues will not be disturbed by tenant default.

The second group of our target market will be made up with those who are looking to buy a property. We believe that this group might be first time home buyers or consumers looking tore-establish their credit. We at Universal Estates hope to have an inventory of renovated properties to pick from that will align within our patrons budget and family preferences.

But if we don’t already have it, we will make sure that we locate a property, renovate it, and prepare it at a value for the client. While our third and last target group will be made up of investors needing attractive investment properties

Though each one of them will have a different property requirement, they tend to be specific with the type, size, location, and price of the property. We also believe that this group tends to buy properties in raw cash, which reduces the level of documents needed and the time needed to complete all ownership transfers.

  • Our Competitive Advantage

Our Competitive Advantage at Universal Estates is meeting a standard of excellence backed by a tradition of professionalism. Our founder Dr Frederick Tony has the philosophy of a “hands-on-management” approach to managing the company’s properties, combined with a strong dedication to quality and innovation to make sure we achieve successful outcomes.

We believe that Universal Estates uses real estate investments for the protection, preservation, and enhancement of invested capital. We hope to build our reputation and foundation upon building a secure future in real estate investment for decades to come.

  • Sales and Marketing Strategies

Our marketing strategies at Universal Estates will focus on building a strong presence with property investors and within the real estate market. Our business will be located in Nevada, but we hope to spread our real estate marketing efforts to all 50 states in the United States.

This we believe will positions Universal Estates as a leader in the real estate investment industry within the busy cities.

We also hope to build strong connections with investors, real estate brokers, mortgage lenders, property management companies, real estate attorneys, insurance agents, appraisers, and property inspectors will further enhance Universal Estates reputation and position within the industry and America as a whole.

Real Estate Syndication Business Plan – Publicity and Advertising strategies

We at Universal Estates understand that one of the most important promotional strategies with respect to a property is providing an open house party. We plan to build a core-positioning message that will be inculcated in all future printed materials which we believe will be pivotal to our business awareness retention of consumers at Universal Estates.

We also plan to leverage a resounding online advertising which will include our business website, Internet marketing, and online networking. We believe that our online marketing will be through various existing real estate sites and Craigslist.

Just like we must have stated above, private buyers, business-to-business relations, investment sales, and rental activity depend on networking and person-to-person contact.

  • Sources of Income

All the services we hope to provide at Universal Estates will involve aligning and working with investors, renters, home-buyers, and the properties that they find worthwhile. Our services will also include meeting and working with mortgage lenders for the sole reason of buying and selling properties. We hope to raise income by providing our innovative services, and these services may include:

  • We will serve as an adviser and advocate during the entire property buying and renting process
  • We will take our time to uncover the buyer’s needs and wants as well as what’s motivating their purchase
  • We will also educate our buyer’s on current market conditions, if they already unaware.
  • We will also research homes within the U.S market and sort through active and inactive listings to make suggestions after cross-referencing buyer’s property expectations
  • We will help our buyers in narrowing their search until they have identified their top choices
  • We will also handle the ins and outs of the negotiation process including the preparation of all necessary forms when making an offer and/or counteroffer
  • We will also provide oversight and follow up for any inspections deemed necessary
  • We will counsel our buyers on how to handle any repairs needed on the property
  • We will also be present at closing to ensure that all the buyer’s interests are protected

Sales Forecast

We all know that as long as we have Individuals living and making money in the United States of America, the real estate industry as a whole will continue to grow and flourish. Businesses need facilities to operate from and families and individuals need shelters, and the real estate industry will continue to provide them.

We believe that Universal Estates is well positioned to take on the challenges that are synonymous in the real estate syndication business, and we are quite positive that we will meet out set target of generating enough income / profits from the first month or operations and grow the business beyond Nevada to other states in the United States of America within record time.

It is important to note that our Sales will be based on the various clients we anticipate acquiring. Revenues are based on an average commission rate of 10% per sale based on closing costs. Universal Estates does not have any significant direct costs of sales. Our sales forecast is expected to grow exceptionally well under the leadership of Dr Frederick Tony.

We believe he will be able to grow the business the first year by making use of an aggressive marketing campaign and word-of-mouth advertising as the primary sources of advertising. We believe that within the first year of operations, projected sales are expected to reach $1.5 million.

Our second year is forecast to see a slightly smaller growth rate of 35 percent at $2.1 million, which we believe is much stronger than the industry average. Our third year’s growth rate will grow 24 percent to $2.6 million.

We also believe strongly that our profits will be equally impressive as Dr Frederick Tony maintains costs while exploiting revenue growth. It is understandable that our projected profit structure will be steadily high over the first five years of operations; our first year’s projection will see a positive profit during the first six months of the first year.

Then after that, profits will grow consistently higher through the first three years of operations. Our profits we expect will be above 23 percent for the first three years.

  • Our Pricing Strategy

We at Universal Estates hope to position our business as a leader in real estate property investment throughout the nation. We hope to provide valuable investment properties to investors and quality housing to individuals with low, medium, and high income.

We believe that because of the continuous displacement of homeowners around the town, renting continues to be very strong in most markets, and buyers are starting to move back into the market because interest rates are at historic lows.

It is very crucial that we at Universal Estates sets fair prices for our available multifamily properties and our single family homes. We believe that our Prices will reflect a similar pricing strategy on properties with the same square footage and floor plan.

  • Payment Options

We at Universal Estates hope to make sure that our payment policy is all inclusive because we understand quiet well that different people prefer different payment options as it meets their specific needs at a particular time. We at Universal Estates do not plan to accept payment by cash because of the volume of cash that will be involved in most of our transactions. Here are the payment options that we will make available to our clients;

  • Payment by via bank transfer
  • Payment via online bank transfer
  • Payment via check
  • Payment via bank draft

It is very important to note that we have chosen banking platforms that will help us provide all these financial services to our patrons. We will make all necessary details available in all required platforms.

Real Estate Syndication Business Plan – Financial Projection and Costing

We believe that our start up expenses will cover all the necessary things we need to start Universal Estates. This includes expenses and the rest in cash needed to support operations until revenues reach an acceptable level. Most of the company’s liabilities will come from outside private investors and management investment, and all these we believe will catapult us to the top. Here are the Avenues we plan to spend our start up capital;

  • The Total Fee for incorporating the Business in Nevada: $750.
  • The budget for Liability insurance, permits and license: $70,000
  • The Amount needed to acquire a suitable Office facility with enough space in Las Vegas, Nevada for 6 months (Re – Construction of the facility inclusive): $50,000.
  • The Cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al): $15,000
  • The Cost of Launching our official Website: $600
  • Additional Expenditure (Business cards, Signage, Adverts and Promotions et al): $76,000

From our detailed analysis above, we will need about $212,350 to set up Universal Estates in Las Vegas, Nevada.

Generating Funding / Start up Capital for Universal Estates

Universal Estates is a new standard real estate syndication business that will offer astounding services to the people of Las Vegas and all other key cities in the United States. This business is owned by Dr Frederick Tony, who will share ownership with the parent company, Integra Investments of the United Kingdom. We have decided to generate our start up capital from the following means;

  • Generate part of the start up capital from the personal savings of our founder
  • Accept soft loans from family members and friends
  • Generate funding from our parent company

Note: it is very important to note that the only capital requirements that we at Universal Estates need are the funds needed to purchase investment properties, renovate those properties, and list them for resale. The investment received will help pay acquisition fees and other expenses associated with the property.

The $1 million from our parent company will help us meet these expenses and provide a solid return for the company and the parent company.

REAL ESTATE SYNDICATION BUSINESS GROWTH: Sustainability and Expansion Strategy

We at Universal Estates plan to build a start-up business in the United States under the parent company, Integra investments of the United Kingdom. Integra investments will continue to own 50 percent of Universal Estates, with the remaining 50 percent owned by Dr Frederick Tony.

Integra investments will contribute $1 million in funds over the next three years to help Universal Estates with the buying of properties and growing of business. We believe that the remaining amount will be through mortgages on the property.

We also believe that incomes from rental units will also aid raise the amount of cash available to buy more properties for Universal Estates. We also plan to make sure that a ten percent commission will be accessed on properties presented to investors, which will give Universal Estates cash position for future properties.

Technology we believe have changed the mobile industry from the very first moment the first computer turned on in an office and mobile technology is remoulding all business industry especially in the real estate sector. We plan to leverage the innovation and technology of the world to build Universal Estates. We at Universal Estates plan to locate our properties through a variety of different channels. These include:

  • Out in the Field

Our scouts at Universal Estates will always scouts neighbourhoods looking for potential properties. We understand that properties or buildings that are poorly maintained are a sign of a potentially distressed property.

  • For sale by owner

We believe that some of the best deals we will be getting at Universal Estates will be those that have a FSBO sign in the front yard. We believe that these are often motivated sellers that are interested in avoiding foreclosure and saving their credit rating. They can often be highly flexible with offers.

  • The Internet

It is well noted that there is no better place for finding a large volume of regular or distressed properties than the Internet. Universal Estates searches lists of available or distressed properties that have been compiled by others in the business, and they include Craigslist, Classified ads, RealtyTrac etc.

Checklist /Milestone

  • Business Name Availability Check: Completed
  • Business Incorporation: Completed
  • Opening of Corporate Bank Accounts various banks in the United States: Completed
  • Opening Online Payment Platforms: Completed
  • Application and Obtaining Tax Payer’s ID: In Progress
  • Application for business license and permit: Completed
  • Purchase of All form of Insurance for the Business: Completed
  • Conducting Feasibility Studies: Completed
  • Leasing, renovating and equipping our facility: Completed
  • Generating part of the start – up capital from the founder: Completed
  • Applications for Loan from our Bankers: In Progress
  • Writing of Business Plan: Completed
  • Drafting of Employee’s Handbook: Completed
  • Drafting of Contract Documents: In Progress
  • Design of The Company’s Logo: Completed
  • Graphic Designs and Printing of Packaging Marketing / Promotional Materials: Completed
  • Recruitment of employees: In Progress
  • Purchase of the Needed software applications, furniture, office equipment, electronic appliances and facility facelift: In progress
  • Creating Official Website for the Company: In Progress
  • Creating Awareness for the business (Business PR): In Progress
  • Health and Safety and Fire Safety Arrangement: In Progress
  • Establishing business relationship with banks, financial lending institutions, vendors and key players in the industry: In Progress
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