5 Steps for New Investors Before Investing in Real Estate Syndication

by | Feb 27, 2023 | Investing Advice


Investing in your first real estate syndication may seem daunting and intimidating. Even though you may logically know that many other investors are also taking this step, you may still feel like you’re on your own. It can be scary to learn the terminology, evaluate deals, and put a large amount of your savings into an investment. However, as you continue to do your research, learn more about passive investing in real estate syndications, and have conversations with others, you will naturally become more confident. To work through your initial insecurities, it’s recommended that you conduct thorough research, ask as many questions as you need, connect with other investors, review past deals, and take the time necessary to select your first investment opportunity.


#1 – Research

To overcome any fears you may have about real estate investment, it’s important to educate yourself. Investing a significant amount of money like $50,000 requires confidence, which can be built through reading books, listening to podcasts, and participating in online communities. Unlike brokerage accounts, once you invest your money, you can’t log in to see it, so gaining insight and perspective from podcasts such as BiggerPockets Podcast, Best Real Estate Investing Advice Ever, The Real Wealth Show, and Lifetime Cash Flow Through Real Estate can be incredibly helpful. One book that is highly recommended for its insights on investing and the power of real estate is Rich Dad, Poor Dad. Remember, successful leaders are often avid readers. The BiggerPockets Podcast also has a vast community of real estate investors, so exploring this resource can be beneficial. Additionally, the Real Wealth Network provides valuable information on growing markets throughout the country.


#2 – Ask ALL the Questions

During your research, you might encounter unanswered questions or things you don’t comprehend. Online forums like BiggerPockets can be helpful, especially for beginners who can ask any question without feeling foolish. Additionally, you can find answers to questions you didn’t even know you had by reading others’ inquiries. Asking questions shows you’re committed and focused on carrying out thorough research, and that’s the kind of investor we aim to collaborate with – those who are confident, analytical, and committed throughout the project’s lifespan.


#3 – Connect

A real estate syndication is, by definition, a group investment in real estate. There are tens, possibly hundreds, of other investors just like you! Some are in your same shoes (newbies) and others remember those days fondly and are itching to share advice or steps as to what they wish they knew back then. Connect with other investors, new and experienced, through online forums, local networking events, and by asking sponsors if they’ll put you in touch with some of their current investors. Creating a community of support from like-minded investors around yourself will help you walk through any fears AND assist you in finding future investment opportunities.


#4 – Review Previous Deals

New investors may feel overwhelmed by the real estate and investment terminology in investment summaries. However, reading more summaries can help them become familiar with the jargon. To make informed decisions, new investors should avoid being dazzled by the first few deals they encounter and instead compare deal specifics, communicate with sponsors, and research the market.


#5 – Take Time

The perception that you might miss out on the “greatest” offer and that opportunities are slipping past you can be caused by the speed at which new investment opportunities fill up. Yet as a novice investor, it’s crucial to resist that panic and take the time necessary to feel at ease, knowledgeable, and confident. Don’t invest your money in the first brand-new deal you come across because of this. Time is required for research, networking, and education.


Real estate syndication investing is not a simple or straightforward endeavor. And it’s quite acceptable to be scared, concerned, perplexed, doubtful, and even apprehensive about your first deal. It’s critical to keep in mind that even the most successful investors have been in your position before. Walk, don’t sprint, through the above steps before choosing your first real estate syndication investment. Because you are elevating your life, savor each step and the confusion and overload you encounter along the road.

You’ll look back and be so happy you did one day.