E17: The Real Estate Syndication Playbook: How to Build Wealth Through Multifamily Investing

Mike Morawski, a longtime real estate professional with over 30 years of experience, shares his strategies for investing in real estate syndications. Mike started in the construction industry before transitioning to real estate. He built a large residential real estate team and property management business. Mike's syndications target a mid-teens return for investors through a combination of preferred returns, cash flow, and appreciation. Today, Mike stresses the importance of relationships, deal underwriting, and raising private capital as the key fundamentals of the multifamily syndication business.

Here are some topics from today’s discussion:

• Mike's background and transition to real estate 
• Mike's focus on multifamily syndications 
• Mike's syndication strategy and target returns
• The fundamentals of the syndication business 
• Mike's mission of providing safe housing 
• Mike's partnership approach through coaching 
• Example of Mike's current syndication deal 

Episode Highlights:

[12:00] The 3 Key Fundamentals of the Syndication Business

In the real estate syndication business, there are many moving parts to consider. Whether you're looking to scale a small multifamily portfolio or a larger one, there are three key fundamentals that remain the same regardless of the playground you choose. These include building relationships, underwriting deals, and raising private capital.

1. Building relationships is crucial, whether it's with brokers, lenders, insurance providers, vendors, passive investors, or key principals with more experience who can join your team. 
2. Underwriting deals involves analyzing past, present, and future numbers to determine their potential profitability. This is where the math comes into play and where the ghost of the numbers of the past, present, and future come in.
3. Raising private capital is a critical strategy for funding your multifamily syndications. Syndication refers to finding a great real estate deal, bringing in private equity, and operating those deals in the middle. 

[17:19] When to Know It's Time to Hand Things Off

To delegate effectively, you need to know your strengths and become the best at them. Whether it's construction, finding deals, underwriting, or raising capital, everyone has unique talents to add value to a team. If you excel at building relationships, underwriting, and raising capital but lack attention to detail, find a partner who can handle those areas. Similarly, if you are a big-picture visionary, find a partner skilled in sourcing deals. By building teams with complementary skills, you can work together effectively on all fronts and achieve greater success than you ever thought possible.

 

[29:32] What to Look for in Syndication Deals

When considering syndication deals, market viability is crucial. Investors should look for markets with strong population growth, as this drives job growth and increases household income. Other important factors to consider are crime rates, quality of schools, demographics, employment diversification, and new units coming online. It's essential to check all these boxes before moving forward with a deal. For multifamily deals, investors should have a specific buying strategy that aligns with their goals. While there are various types of real estate deals to syndicate, multifamily properties offer attractive investment opportunities. Consider investing in senior housing, mobile home parks, self-storage, tax credit deals, or affordable housing within the multifamily space.

Resources:

Multifamily Unplugged