Mastering Real Estate Syndications: Market and Property

Sep 11, 2023

In the thrilling world of real estate syndications, due diligence is your trusty steed, guiding you through the twists and turns of investment opportunities. Much like a jockey assesses their horse before a race, you, the passive investor, must scrutinize two critical components: the market and the property. Let's dive into the saddle and explore the essential aspects of due diligence for real estate syndications.

The Market Aspect

A. Economic Cycle Market

Picture real estate investments as a thrilling horse race with different phases:

  1. Recovery: The starting gate. Economic rebound boosts property values.
  2. Expansion: Your horse gains momentum, with growing demand and rental income.
  3. Hyper Supply: A tight turn; be cautious. Oversupply can lead to lower rents and vacancies.
  4. Recession: The home stretch, but beware economic downturns that may affect property values.

Understanding these phases is like reading the racecourse terrain – it's vital to your strategy.

B. Geographic Market

Imagine the race occurring across various tracks, each with its own quirks:

  1. Landlord-Friendliness: Some tracks are more favorable for landlords due to tenant laws.
  2. Population: A bustling crowd (population) is good news for rental property.
  3. Job Market: A jockey's dream – jobs attract tenants.
  4. Resilience: Track conditions matter; assess the area's ability to weather economic storms.
  5. Tenant Profiles: Consider job growth and income levels for the right fit.
  6. Competition: Keep an eye on rival jockeys (investors) and their horses (properties).
  7. Building Permits: Too many tracks (new buildings) may oversaturate the market.
  8. Safety: Ensure your chosen track is safe for your horse (property).

Property Due Diligence

A. Property Age and Condition

Your horse's age (property age) matters:

  • Challenges: Older horses (properties) may have plumbing and roof issues. Address these concerns.

B. Renovations and Unit Details

Like a jockey's whip, renovations can boost performance:

  • Significance: Renovations can improve property value.
  • Unit Layout: Know your horse's (property's) stride – layout affects rentability.

C. Income Enhancement

Discover the golden carrot – income enhancement:

  • Reserved Parking: Offer carrots (amenities) like reserved parking to attract tenants.
  • Net Operating Income: It's the race winnings; understand how it impacts property value.
  • Cap Rates: The odds; calculate them wisely.

D. On-Site Management

Imagine a trainer for your horse:

  • Benefits: On-site management is your reliable trainer, especially in larger stables (properties).
  • Management Offices: Inspect the stables (management offices) – well-maintained?

E. Vacancy Rates

Two kinds of empty stalls (vacancies):

  • Economic Vacancy: Like a lame horse (empty stall), it affects your investment.
  • Physical Vacancy: A jockey's challenge; assess its impact.

Additional Considerations

A. Security and Location

Don't forget the jockey's safety gear (security) and the racetrack's terrain (location):

  • Security Measures: Cameras and security systems ensure a safe race.
  • Location: Race track (property) near amenities and schools scores high.

B. Accessibility and Walkability

Think of access and walkability as smooth race conditions:

  • Public Transportation: Easy access is like a clear racecourse.
  • Walkability: Happy tenants if they can walk to amenities.


As we cross the finish line, remember:

  • Due diligence in real estate syndications is your compass.
  • Assess the market phases and track conditions.
  • Scrutinize the property's age, renovations, and income potential.
  • Evaluate on-site management and vacancy rates.
  • Consider security, location, accessibility, and walkability.

Saddle up, fellow passive investors, and use these due diligence insights to make informed real estate syndication decisions. For a comprehensive list of due diligence questions, gallop over to our website.

Have you experienced the thrill of real estate syndication due diligence? Share your thoughts and stories. Explore more resources on our website and join the race to financial success in real estate syndications!

Micy Liu

Founder and Managing Partner

Life Mission Capital