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How Real Estate Syndications Actually Work

A real estate syndication is a group investment model where multiple investors pool their money together to buy large real estate deals—like apartment buildings, self-storage, or commercial properties.

It’s kind of like crowdfunding, but for real estate—with structure, legal compliance, and clear returns.

Two Main Roles:

The Sponsor/Operator (like Loomba Investment Group):

Finds and analyzes the deal
Arranges financing
Manages the property and business plan
Communicates with investors and distributes returns

2.The Limited Partners (LPs – Passive Investors):

Contribute capital to the deal
Own a share of the investment
Collect passive income and profits without day-to-day work

Think of it like flying first class:
You enjoy the ride while the pilot (sponsor) handles the controls.

How You Make Money:

As a passive investor, you typically earn two kinds of returns:

Cash Flow (monthly or quarterly income)
Profits from Sale or Refinance (your share of the upside)

Depending on the deal, you may also get:

Tax benefits like depreciation
Equity ownership in a hard asset
Preferred returns before the sponsor gets paid

Example:

Let’s say Loomba Investment Group finds a 100-unit apartment deal:

Total cost = $10M
The bank finances $7M
We raise $3M from investors

If you invest $100K:

You become a shareholder in the deal
You receive quarterly cash flow (e.g., 6–8% per year)
When the property is sold (say in 5 years), you receive your share of the profits