Risk reduction is a big multi-family syndication advantage that we have. A syndication by definition means that we’ve got a number of investors pooling capital.
So, through a syndication, an investor can have access to a high quality, institutional grade investment for a low dollar amount. This might be a $50,000 investment minimum, rather than going out and putting a million dollars into one basket, so to speak, you’re able to participate as an investor in a syndication with a number of other investors. And so the risk is spread out there and you’re not necessarily putting a giant amount of capital into one project.
Furthermore, if you’re investing with a team that’s got a strong track record, in terms of the property management company and the sponsor and everybody on board having done this, and having a track record, that’s further reducing your risk in a project like this.
So, by investing in a multi-family syndication you’re able to be one of a handful of investors and it spreads the risk. You’re also able to participate in these larger institutional grade investments without necessarily having to bring a million dollars plus capital to a single project.
So, huge advantage there in terms of risk reduction.
