How To Start A SAAS

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                                            Syndication of Real Estate
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                                         Are you Interested in a career in real estate but don't know where to start? Have you ever considered syndication? Real estate syndication is one of the best and safest ways to enter the financial market. This allows investors to enjoy the benefits of owning an investment property without having to deal with the hassle and stress of the owner.
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                                          The concept of real estate syndication isn't new, but until now, access to such opportunities was limited. The implementation of the JOBS Act of 2012 and SEC Rules of 2015 made it easier for investment sponsors to raise capital and create opportunities for the average investor.
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                                         <b>What is Syndication of a Real Estate?</b>
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                                         A real estate syndication (also called a "property syndication") is a partnership between multiple investors to complete a real estate project. Investors combine their capital and resources to acquire real estate that could not be acquired individually. If the property is held as a rental property, they jointly manage the property. Real estate syndicates typically have two types of roles:
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                                         One of the most important parts of the real estate syndication process is the syndicator, also known as the "Sponsor." The syndicator's role is to purchase, renovate, and/or manage properties. Another important player in real estate syndication is the Investor. They are also commonly called limited partners. Investors provide the funds to purchase properties but mostly play a passive role. As passive members of real estate syndicates, they are the source of capital and own a percentage of real estate based on the amount invested and the number of potential parties.
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                                          Many real estate syndications often involve third parties known as "Joint Venture Partners" (JVs) or "contributing partners." Trustees and investors benefit from strong and transparent communication between venture partners. When you join a real estate syndication, you have to decide if you want to be a syndicated entity or an investor. Your experience, skills, and capital will determine which role is right for you.
                                         
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                                         At the start of a real estate syndicate, all involved investors must decide how the company gets structured for tax purposes. Syndication is most often structured as a Limited Liability Company (LLC) or limited partnership. In this scenario, investors are shareholders or limited partners.
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                                         Some groups choose to split profits equally, but many real estate syndications do not. Syndicators typically get around 30%, while passive investors get around 70%. Investors usually earn more because they invest more. The syndicator will donate only 5– 10% of an investment, or not at all. Syndicators oversee real estate transactions and receive an "acquisition fee" ranging from 1 to 5% of the transaction value. Investors typically make more money in real estate syndicates than others, but the syndicator's returns vary depending on their responsibilities.
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                                         To recap everything you've learned, work with other investors in the real estate syndication industry to buy properties that you couldn't buy otherwise. A real estate syndication is the classic way to describe real estate crowdfunding. It involves the purchase of real estate investments by raising capital from a large group of like-minded investors. Real estate syndication is the raising of capital from individuals. It is an effective way for investors to pool their resources and invest in assets that are too large for them to manage on their own. If you manage to find a pending transaction but don't have the funds to pay the deposit, you can syndicate by finding someone else to fund the transaction. Or, if you have a down payment but don't have the experience or confidence to manage the property on your own, you can use the real estate mix to attract experienced partners to execute the project and help you with other financial resources so that you can close more deals.
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                                         You can use real estate syndication for retirement planning as well. Syndicates are used as an annuity by many people, including myself. You may want to consider real estate syndication. The reason is that you can earn a monthly income from asset management and acquisition fees. And if you are an agent, you can sell your business and earn a lot of commission.
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                                       <h5 style="font-family: Helvetica;"><b>The 4 Important Things to Know When Fundraising</b></h5>
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                                         As an actual property investor, you need capital resources with a demonstrated track record. There are four important things to know when fundraising:
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                                        <b>1.</b> It's important to relax and be yourself. Pay close attention to the potential investors you are negotiating with. When you say you will call them back, remember to call them back and do what you said you would do. The real estate business is relational. If you don't understand this, your fundraiser will not be successful.
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                                        <b>2.</b>If you are raising capital, I want you to think that your grandmother is investing in your business and using her savings to do so. If you have this mindset, you will be very careful with your money and not spend it on shady deeds.
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                                         <b>3.</b>Real estate syndications are compliant with strict laws, rules, and regulations designed to protect investors. Make sure you understand these laws and regulations before consolidating a transaction.
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                                          <b>4.</b>Do not attempt to form a real estate corporation without the help of a good attorney. An experienced attorney ensures that you have the correct documentation, provides the necessary legal information, and provides legal protection when entering into agreements with individual investors.
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                                         Forgetting even one of these points could land you in litigation or worse. There is a government agency called the SEC (Security and Exchange Commission) whose purpose is to protect investors from risky, illegal, or fraudulent financial activities by asking you, the person providing the information, to provide complete and accurate financial information.
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                                       <h5 style="font-family: Helvetica;">Real Estate Syndication Guidance with Example</h5>
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                                         How exactly does the syndication process work? Here is a working example. It depicts the syndication process in seven steps from beginning to end. It will also answer the question of when you should syndicate. Let’s begin -
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                                       <h5>1.Deal</h5>
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                                         First, you need to look for a property to buy. For this example, consider a multifamily contract with 200 apartments and value-added ($20 million). You need another 5 million dollars to upgrade. There are several options for obtaining this property. If you have a $5 million down payment and $5 million in improvements and can finance yourself, you could easily buy the property on your own. You are the sole owner. You can own it through your company or buy it on your behalf. This is the simplest and most basic example.
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                                         The second option is to invite someone you know well. Just say, "Listen, I need $5 million." Then we need another $5 million to do all the upgrades. $10 million can be divided in four ways, each of which is unique and can be actively participated in. You can then team up with three other partners. Three of them provide capital, and one provides investment management experience. But let's say you have no capital but you have experience in real estate. You know the market well. You have built a team around you. Maybe you only have $200,000 to $300,000. But it's still far from $10 million. Yes, you can get a contract offer. You can manage your property well. The only problem? you do not have enough financial resources. This is where distribution comes in. Designed to raise large amounts of money. You will turn to passive investors who have capital and want it to work for you. Real estate, especially multifamily homes, is a great asset. Are you looking for better cash flow, stability, and tax benefits? So, you went looking for these investors, and thus like this then they invest in your organization.
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                                         So, when exactly will you syndicate? The answer is when you don't have the funds to close the deal yourself. It means no experience, track record, team, or capital. In other words, you are drawing completely reluctant investors into your business. Earn superior returns and enjoy tax benefits, stability, upside potential, and the use of leverage.
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                                          <b>2. Due Diligence</b>
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                                         This includes many things. You will check the rental listing to make sure that the rent, the seller told you about is in your bank account. Maintain your unity and make sure to pay for what they say. They inspect the property and also make sure the roof is in good condition. They check everything on the property.
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                                         Get a quote for the job just to make sure the quote matches what the contractor says. In short, ensure that everything about the property is what you expect it to be (or should be), as advertised, and that any potential issues are addressed.
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                                         Let's say the seller says the roof is three years old for him. However, upon investigation, it was determined that the roof needed to be replaced. You went back to the seller and said, "The roof you mentioned is a few years old." What can we do about it? This is step two, but the reality is that there is no end. They always do their due diligence during this process. Keep the numbers. Let's say you find that some leases cost $25 less per month than they were advertised. Your spreadsheet needs to be updated to reflect this. When it comes to insurance underwriting, you want the best and most accurate numbers. By entering exact numbers, we want to help investors know exactly what they're investing in.
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                                         <b>3. Marketing</b>
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                                         All syndicators are different. But whenever syndicator signs a deal or negotiations are going well, they alert their investor database and say, "Mr. Investor, I'm considering this deal; it looks like a bargain; are you interested?" The answer is yes or no. Some syndicators extract a small group of people (the main investors) from the database. Other syndicators are happy to mail everyone and work on a first-come, first-served basis. If you're looking for a syndicator or information on syndicating, ask the person you're speaking with how it works and what the process is like.
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                                         Then the marketing machinery kicks in. They take beautiful photos of the property. They may do drone photography. They also create videos for property management companies to tell potential investors what they love about the deal. Run videos, webinars, Zoom calls, and phone calls as a syndicator. It notifies the database of upcoming deals and puts together a marketing package (usually a brochure). It is intended to highlight important details of the investment and attract the interest of investors considering investing in the company.
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                                       <h5 style="font-family: Helvetica;"><b>4. PPM/MOU</b></h5>
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                                         You will then send a PPM (Private Placement Memorandum) or MOU (Memorandum of Understanding) to interested investors. PPM is the bible of investment. It contains everything you need to know about investing. It is required by law to provide security. It covers the structure of investments, the structure of syndication, who gets paid when, and what happens when X, Y, and Z occur. It explains everything a potential investor needs to know about the investment.
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                                         So, if you are an investor, you can hire a lawyer to do the verification. A tax accountant can also confirm this. You have to make sure you have a very clear idea of what the investment entails, the role of each, and what's involved in that investment. If you have any further questions about the contents of the PPM, please contact the Syndicator. The syndicator then forms a legal entity to purchase the property. So, if the building's name is XYZ Apartments, the entity's name might be XYZ Property, Incorporated. They will state that this is the legal entity that owns the property. Syndication includes the types of shares sold by that company. At the same time, syndication leaders should be prepared to raise funding for the unit
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                                       <h5 style="font-family: Helvetica;"><b>5. Loan</b></h5>
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                                         In step 4, the investor signed the PPM (if you are an investor, you signed the PPM). As a limited partner and passive investor in the company, you have agreed to purchase several shares and receive all associated profits. Step 5 is to transfer the funds to the entity's bank account. It doesn't work without money. Therefore, this step is very important. As an investor, you have to transfer your investment to a bank account. This must be done before closing, as the company buying the property will need these funds to close the property.
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                                         Let`s say the store closes on December 1st of this year. A few weeks before they close, you need to transfer money to the account. Each syndicate is different, but they are usually difficult to raise money for.
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                                       <h5 style="font-family: Helvetica;"><b>6. Outcome</b></h5>
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                                         All the money will be credited to your bank account once the transaction is completed. Everyone is ready for rock and roll. The management company is ready to take over the property, and the business plan is complete. It's a day to celebrate. Still, it's time to roll up your sleeves. Because then the real work as syndicators and as the people who run the business begins. Then execute your business plan. Implementing renovations, optimizing spending, building all new management teams, changing the way advertising is done, renaming properties, and more, the value plan has many moving parts.
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                                         So, closing is just the beginning of the process. Syndication doesn't end here. Most syndicators are involved in this investment as limited partners and passive investors, so a lot has to happen during this period. The total term is 5-7 years. Sometimes it takes 3–4 years; sometimes it takes 10 years or more. It all depends on your specific listing and real estate needs. So, if you forget your settings, it's not just a holiday. As an investor, you receive distributions. Handouts can be sent quarterly. Some people like to send money monthly. It's up to the syndicator. So, if you're thinking about investing with someone, consider this question.
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                                         "Can you send me quarterly materials?" Can you provide me with monthly subscriptions? As a syndicator, you will work with the management team and property managers to execute a business plan. If it is below market value, you will have to take appropriate steps to add value and bring the rent up to market value, and if refurbishment is required, you will refurbish the unit. Change your branding and your ads to be more effective. When you change your tenant profile, decide which tenant to switch to so you can bring in other tenants that fit the community you're building. The goal, of course, is to increase the value of the property. This is how investors get their returns. They increase cash flow to pay more. They also increase the NOI of the property and its value. And that means higher selling prices.
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                                       <h5 style="font-family: Helvetica;"><b>7. Sale</b></h5>
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                                         Depending on your business, you may need to refinance at some point. Even if the property is improved enough to be refinanced, as a passive investor, you can get some of your original investment back if you can return some money to the investor. And since that money is repaid, the company's profit margin goes up. It may or may not happen. But at some point, the time to sell the property will come, because one needs to consider the return on investment and return on equity. When you add too much value to your assets in your appreciation game, there comes a time when you have too many assets tied to them. And the time available for these tax credits is limited. It makes sense to sell it so that you can switch to another syndication and start the process all over again.
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                                         So, the sale is final. And the same process happens with new buyers, who sign contracts, conduct due diligence, and go through this entire process with investors. The same happens with former investors and general partners in sales syndication. On the day of the trade, the company will be dissolved, all money will be paid to the investors, and as passive investors, you will receive the largest check. Money, as always, flows like Hansel and Gretel in the forest. These are small breadcrumbs along the way. And at the end of the trial period, you can get a lot of money from sales. Value-added products and value- added investments build or grow valuable wealth and increase NOI. Then get a big fat check.
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                                       <h5 style="font-family: Helvetica;"><b>Final Result</b></h5>
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                                         So, this is the syndication process, from the beginning to the end, in seven points:
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                                         1. First, sign the contract.
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                                         2. Then due diligence will be conducted.
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                                         3. Next, start marketing your property.
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                                         4. Next, submit the PPM or OM.
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                                         5. The next step is to fund the deal.
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                                         6. Then make deals, manage them, execute business plans,
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                                        7. Finally, profitably sell the deal.
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                                         For new buyers, the process starts all over again. Syndications are one of the great ways to raise large sums of money from passive investors. And that's what it's made for.
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How To Start A SAAS

Chapter-1

Chapter-2

Chapter-3

Chapter-4

Chapter-5

Chapter-6

Chapter-7

Chapter-8

Chapter-1

Chapter-2

Chapter-3

Chapter-4

Chapter-5

Dan Lesniak

Cody Davis

Samuel Zell