What does "real estate syndication" involve?

Real estate syndication involves pooling resources from multiple investors to purchase, develop, or manage real estate properties. In this arrangement, investors come together to combine their financial resources and share the risks and rewards associated with real estate ventures. This collaboration allows individuals who may not have sufficient capital to invest independently to participate in larger deals, thus benefiting from shared expertise and diversified investments.

The process usually includes the establishment of a legal entity or syndicate, where one or more sponsors or syndicators handle the management of the investment, while passive investors contribute capital. This model is often used for commercial real estate projects, multifamily housing, or large redevelopment projects, making it a popular strategy in the real estate market.