265. Syndications Collapse! (Listen BEFORE Raising Capital for Real Estate) w/Mauricio Rauld
Self Storage Income
AJ Osborne
4.9 • 591 Ratings
🗓️ 7 October 2024
⏱️ 35 minutes
🧾️ Download transcript
Summary
Real estate syndications have fallen off a cliff. Those currently stuck with underperforming properties are scrambling to find ways to pay the bills and stop banks from foreclosing on them. All those inexperienced investors who wanted to become real estate syndicators? Those dreams are drying up. Mauricio Rauld, real estate syndication attorney, has seen transactions collapse as interest rates rose and cap rates expanded. But, because of it, we could be coming into a huge opportunity to raise capital—you just need to know the RIGHT way to do it.
In this episode, we’re talking about what happened to real estate syndications, why syndication transactions have cratered, and some good news for investors waiting for sellers to return to reality. Syndicators are getting desperate. They’re sending out capital calls to keep their deals afloat and are facing refinances with massive repercussions. How do you avoid getting into this spot yourself?
If you’re raising capital for real estate, you MUST listen to this episode. Mauricio is sharing some key “do’s and don’ts” that could stop you from breaking SEC compliance and ending up in hot water. Plus, if you DO want to invest in syndications, we’re sharing tips to help you invest in the right one instead of the one with the "highest return."
What you’ll learn in today’s show:
- Why so many real estate syndications are failing in 2024
- The “do’s and don’ts” of raising capital for real estate, ESPECIALLY if you’re syndicating
- Why syndicators are making capital calls to save their drowning deals
- Managing expectations as a real estate syndicator and one thing AJ tells EVERY investor he works with
- New accredited investor qualifications and the significant change that could be coming soon
- Whether banks will foreclose on many of these failing syndications
- —
Work with Mauricio - https://www.premierlawgroup.net/
Grab Mauricio’s Book on Legal Strategies - https://legalstrategiesforeveryone.com/
Hear AJ and Mauricio on Drunk Real Estate - https://www.drunkrealestateshow.com/
Transcript
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| 0:00.0 | There's a world of hurt in the syndication world. |
| 0:03.0 | LPs are pissed. |
| 0:04.0 | And I think people are learning their lesson. |
| 0:06.0 | All these little questions are key before you write that check, |
| 0:09.0 | because once you write that check, you've got absolutely no control over things. |
| 0:17.0 | Okay, a little different setup here for the podcast, so storage income we're doing. We're in the middle of the limitless conference center. So Maricio, thanks for joining me here, man. Always good to be next to you in a podcast, my friend. Every week. Every week. And now you're going to double up. Yeah, I feel like we should switch seats since last night we were in the same positions here. That's true. We really were. We were just doing this last night. So today, obviously, I'm bringing you on for those that don't know, you are a syndication attorney. You specialize in it. You help my firm out, as well as a lot of other firms. Uh, Why don't you tell people, though, a little bit about your niche, really legal niche? |
| 0:57.8 | Yeah, I'm a... you help my firm out, as well as a lot of other firms. Why don't you tell people, though, |
| 0:54.5 | a little bit about your niche, really legal niche? Yeah, I'm a real estate syndication attorney. |
| 1:00.4 | So I represent real estate investors who are raising capital to go buy big real estate deals, |
| 1:07.0 | whether it's self-storage, multifamily, you know, mobile homes, what have you. And they need somebody like me because when you're in that business of, you know, pooling monies |
| 1:16.0 | from passive investors, you're actually in the business of selling securities, which I know |
| 1:20.2 | doesn't make a ton of sense because you're just buying a self-storage unit. |
| 1:22.9 | Like, why is the SEC, the securities and exchange commission even involved? |
| 1:26.9 | But their wacky way of defining what a security is basically includes any time you take money from passive investors where the returns are generated by your efforts. |
| 1:36.3 | Like you're doing all the work, somebody just cuts you a check, then you're selling securities. |
| 1:41.3 | And so you need somebody like me to make sure that you do it compliantly because as you can imagine, the regulatory landscape of raising capital is significant. |
| 1:49.5 | This is an interesting time to be having the subject because the last two years, especially |
| 1:55.4 | in the capital raising world, that has changed dramatically. So why don't you talk a little bit about what you have seen |
| 2:04.4 | and what your firm has seen over the last year and a half, how things have changed because you do |
| 2:10.3 | commercial real estate. So in the commercial real estate landscape, how have things changed |
| 2:14.6 | on the capital raising side? It's been a dramatic change since basically, I'm going to say June of 2022. |
| 2:20.9 | So it's been just over 24, 25 months now. |
... |
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