The Syndicate Boom — Risks and Rewards

The real estate syndicate is a pooling of resources of many investors to buy a building or long-term lease-hold. When you buy an interest or participation in a real estate syndicate, you buy a part of a building or the lease-hold.

The real estate syndicate with large public participa¬tion is about 10 years old. It sure is big business now. Forbes Magazine estimate that in 1958-1959 3 billion dollars worth of public participations in syndicates were sold.

There must be good reasons for this success and there are. Investors are promised and get substantial returns such as 10%, 12% or more per year, part of it tax shel¬tered. Good syndications offer a reasonable degree of se¬curity. Many investors have been rewarded with substan¬tial income and even growth of their equity. But others have lost money.

Every day new syndicates are springing up and new participations are offered. As real estate prices go up, it is harder to find real estate which represents a conserva¬tive investment and offers a good yield. As a consequence, some of the deals now being offered are highly specula¬tive.
Are you going to invest in a syndicate that will con¬tinue to make payments in 10 or 15 years from now and perhaps increase its payments? Or are you going to invest in a loser? The answer is simple: know what you buy. Our problem then is to get the facts on which to make a decision. Where and how do you get that information?

Next: How to get Information