True American Capital: What Do We Do?

In short, we purchase apartment buildings by pooling money together with other investors; everyone who invests then shares ownership of the property and thus receives distribution checks as we collect rent from our tenants. This is called Real Estate Syndication or more specifically: Apartment or Multifamily Syndication. 

A ‘Syndication’ is the acquisition of the property, (the way in which entities purchase/acquire a property). The literal definition of syndication is: the transfer of something for control or management by a group of individuals or organizations. You could probably guess there are numerous people involved in a syndication. There are the general partners, GP’s, and there are limited partners, LP’s. 

The Limited Partners are our passive investors. The number of LP’s on a deal could range from 3 to as high as 60, potentially more, depending on the price of the property. LP’s typically own the most equity in the property. The LP’s (generally speaking) do not make managerial or operational decisions during ownership, which works well for them since the classic ‘passive investor’ does not want to deal with the day-to-day operations of the property; they merely want to invest and enjoy the cash flow.

On the other side, the General Partners’ ownership equity share in the property less than the LP’s, however there are less general partners as a whole. The GP’s are made up of usually 3-7 people who take on various roles in sourcing and closing a successful syndication. Some examples of GP roles are: underwriter(s), capital raiser(s), a deal sourcer(s), a sponsor, a due diligence expert, asset manager(s), etc. The GP’s are also referred to as the operators and they are active investors. The GP’s do an extensive amount of research and networking in order to find the property. They then underwrite the property’s financials, confirming it is a true cash-flowing asset that will provide the return investors are excited about. There is a substantial amount of due diligence performed both with the financials (income versus expenses) of the property and physically inspecting the property including vetting every unit thoroughly.

Apartment Syndication is most certainly a team sport.  To bring such an amazing team together to acquire properties that provide financial freedom to everyone involved is truly amazing. 

Hudson Robison

Founder/CEO – True American Capital

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