456: The Harsh Reality Real Estate Syndicators (and Investors) Face in 2024

BiggerPockets Money Podcast

BiggerPockets

Investing, Education, Business

4.6 • 2.9K Ratings

🗓️ 6 October 2023

⏱️ 60 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Many real estate syndications are facing absolute failure in 2023. But, even if you aren’t investing in any, this could be a learning experience like no other to help you build your wealth in the future. If you’ve never heard of a real estate syndication before, here’s a quick summary: a real estate syndication is where an “operator” raises money from a group of investors to buy a large commercial property, often an apartment complex, self-storage facility, or housing community. Over the past ten years, these investments have boasted massive profits, but everything is about to change. Real estate syndications face obstacles like they never have before. Rising interest rates and vacancies, a backlog of evictions, plummeting prices, and inexperienced operators who have NEVER been in a down market. These failed deals could lead to opportunities for you to invest at a massive margin, but how do you know which deal is worth putting money into? J Scott, world-famous investor, flipper, syndicator, and author, is on the show to explain exactly what to look for in a syndication, whether investing now is the right move to make, and what to know before investing in a syndication. The right syndication can make you hundreds of thousands in a completely hands-off, passive investment. The wrong syndication can tank your entire net worth. How do you know which is which? Tune in! In This Episode We Cover Syndication investing explained and whether putting money into this “passive” investment is worth it The commercial real estate crash and why property values are plummeting Massive economic headwinds syndicators face in 2023 and why many won’t survive The danger of “floating rates” and why many syndicators could be forced to sell Accredited vs. non-accredited investors and who should consider syndication investing The most critical question you should ask ANY syndicator And So Much More! Links from the Show BiggerPockets Money Facebook Group BiggerPockets Forums Finance Review Guest Onboarding Join BiggerPockets for FREE Scott's Instagram Mindy on BiggerPockets Grab Scott’s Book, “Set for Life” Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Money Moment Grab the Best-Selling Real Estate Books by J Scott Syndications: Everything You Need to Know BEFORE You Invest The Biggest Crash Imaginable is Coming For Commercial Assets REITs: How to Make Real Estate Money WITHOUT Owning Rentals w/Jussi Askola Click here to check the full show notes: https://www.biggerpockets.com/blog/money-456 Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Email us: [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Okay my dear listeners, strap in. Welcome to the Bigger Pockets Money Podcast where we interview Jay Scott and talk about syndications and what can happen if they go wrong.
0:13.0	Hello, hello, hello. My name is Mindy Jensen and with me, as always, is my sober co-host, Scott Trench.
0:20.0	Great to be here with you Mindy and with my co-host who has contemplated the meaning of the phrase, you can't drink all day unless you start in the morning.
0:29.0	Every time I start in the morning, every time I start in the morning, I think a Scott.
0:35.0	That's a lot. I think it's more than you would think. I think we should say that Jay Scott has a podcast called Drunk Real Estate.
0:45.0	Not just we're sitting here talking about getting drunk at whatever time you're listening to this show.
0:50.0	All right, Scott and I are here to make financial independence less scary, less just for somebody else to introduce you to every money story because we truly believe financial freedom is attainable for everyone.
1:01.0	And even though real estate syndications are a great investment, we also want to show you what happens when they don't always go according to plan.
1:09.0	That's right. Whether you want to retire early and travel the world, go on to make big-time investments in assets like real estate, start your own business or confront the sober realities of the commercial real estate market in today's market conditions.
1:23.0	We'll help you reach your financial goals and get money out of the way so you can launch yourself towards those dreams.
1:27.0	That was good Scott. That was really good.
1:30.0	Okay, it's time for the segment of our show called the money moment where we share a money hack tip or trick to help you on your financial journey.
1:37.0	Today's money moment is to hang out with friends, but you don't want to spend a bunch of money on dinner out through a potluck party at your house.
1:45.0	Have your friends bring a side dish or dessert and BYUB.
1:51.0	You still get the benefits of a fun experience, all for the price of a single item to share and sometime clean it up your house.
1:58.0	Some cost effective potluck items are baked potatoes, crock potting a whole chicken, spaghetti and meatballs and really any casserole.
2:07.0	Do you have a money to press email money moment at bigger pockets.com.
2:11.0	Okay, Scott, before we bring in Jay, let's talk about your syndication investments.
2:16.0	Are you investing in syndications right now or thinking about investing in syndications right now?
2:20.0	I am in a syndication that I invested in a few years ago.
2:24.0	I think that will be impacted by recurring market conditions, but with professional operation.
2:30.0	And I am not currently exploring lots of syndication opportunities.
	...

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