Real Estate Syndication
Syndication, in its simplest form, is a combining of individuals that invest together into a real estate project that would be too large for any single person. Syndication has been around for a long time. Prior to passage of Title II of the JOBS Act in September of 2013, U.S. security regulations mandated that syndication be conducted privately pursuant to Section 506(b) of Regulation D. Since the passage of Title II, syndication can be conducted publicly pursuant to Section 506(c) of Regulation D.
The significance of this amendment to Reg D is huge. Whereas in the past Reg D offerings were prohibited from “public solicitation”, the new regulation allows for such offerings to be advertised to the general public. Other portions of Reg D remain in place such as investor suitability standards and the definition of an “accredited investor”. There are a lot of accredited investors who have never been exposed to real estate syndication.
Investing in a Reg D offering can often require as little as $25,000. Hard to imagine owning an apartment building or a hotel for such a small investment. That is the power of syndication. Investors pool their money and are able to include real estate as part of their investment portfolio.
To learn more about how real estate can become part of your investment portfolio, contact us for a private consultation.