The role of the general partner in multifamily and btr-sfr real estate syndications

Dear valued existing investors and future investors,

welcome to this week’s cpi capital’s news briefing. Our regular, weekly newsletter contains a mixture of updates, commentary and informative related articles about the lucrative world of passive real estate investment.

If you are already one of our subscribers, thank you. If you are not, take the chance to sign up to our newsletter now and keep right up to date with all you need to know about syndicated real estate investment!

Download and read our free e-book: 25 fundamental questions to ask a syndication sponsor before making your investment

in any multifamily and/or btr-sfr real estate syndication, there are a number of key participants, taking a variety of important roles. For example, the general partner, sometimes called the syndicator, deal originators, loan providers and, of course, limited partners or the multitude of investors providing a large proportion of the equity for the transaction.

The general partner (gp) is generally involved in almost all matters relating to the syndication and plays a crucial role in its success. As the active manager of the project, the gp is, in summary, responsible for identifying and acquiring the investment property, managing the day-to-day operations, making strategic decisions and overseeing the overall performance of the project, all in return for a fee(s).

It’s, therefore, well worth having a closer look at the key responsibilities of the gp and the factors to consider when choosing a gp for a real estate syndication.

Identifying and acquiring multifamily and/btr-sfr investment properties

one of the primary responsibilities of the gp is to identify and acquire investment properties that have the potential to generate significant returns for the passive and any active investors, as well as arranging financing. The gp must, therefore, have a deep understanding of the relevant real estate market and be able to identify properties that are undervalued or have significant upside potential. Once a property has been identified, the gp will conduct thorough due diligence to assess the feasibility of the project and negotiate the terms of the purchase agreement.

Managing day-to-day operations of the syndicated property

once the investment property has been acquired, the gp is responsible for managing the day-to-day operations of the project. This includes overseeing property management, leasing, maintenance and repairs. The gp must have a team of experienced professionals who can manage the property effectively and ensure that it is maintained to a high standard so as to maintain its cashflows.

Making strategic decisions

the gp is also responsible for making strategic decisions which will impact the overall performance of the property. This includes deciding when to buy or sell properties, determining the optimal rent levels and implementing marketing strategies to attract and retain tenants. The gp must have a very good understanding of the concerned real estate market and be able to anticipate changes in market conditions to make informed decisions.

Overseeing the overall performance of the multifamily syndication

the gp is ultimately responsible for the overall performance of the project and must ensure that it meets or exceeds the investment goals of the investors. This requires ongoing monitoring and analysis of the project’s financial performance, and making adjustments as needed to ensure that it remains profitable. The gp must be transparent with investors and provide regular updates on the project’s progress and performance.

Choosing a gp for a real estate syndication

choosing the right gp is critical to the success of a multifamily real estate syndication. There are several factors to consider when selecting a gp and these include their experience, track record and reputation.

Experience

the gp should have a proven track record of success in real estate investment and management throughout various real estate cycles. They should have experience in acquiring and managing properties similar to the one being considered for the syndication. Ideally, the gp should have a strong team of experienced professionals who can assist with property management, leasing, maintenance and repairs.

Track record

the gp’s track record is an important indicator of their ability to manage the project effectively and generate returns for both active and passive investors. Investors should review the gp’s past projects and performance history, and consider factors such as the rate of return, cash flow, and overall profitability. They should also consider any challenges or obstacles that the gp may have faced and how they were able to overcome them.

Reputation

the gp’s reputation in the industry is also an important consideration. Investors should review the gp’s references and speak with other investors who have worked with the gp in the past. They should also research the gp’s online presence and reviews to ensure that they have a positive reputation and are well-regarded in the industry.

Sign up here to receive our investment offerings

cpi capital understands that the role of the gp in a multifamily real estate syndication is critical to the success of the project. After all, most of the key tasks and decisions as outlined above fall to this person or entity.

Fortunately, cpi capital has, over the years, been able to establish itself as a successful gp with an enviable track record of success. This has been well founded on strong leadership as well as an experienced, knowledgeable team with a diversified skill setall working towards the objective of maximising returns for our passive investors.

Yours sincerely,
august biniaz
CIO, co-founder cpi capital