Key Takeaways:

Transcript

Deconstructing a Syndication From Deal Selection to Closing

Let’s do a deal deconstructed all the way from choosing the deal to getting it closed and funded. This is a video I recorded about two years ago, with a very small group of new syndicators. It’s the kind of work that I do a lot of times with my clients today. We don’t offer the coaching program anymore, but I hope you find it useful.

Basically, what we’re going to be doing is we’re going to deconstruct a deal. We’re going to go from the beginning of the deal all the way to the close of escrow.

Defining the Founder Investment Theory and Deal Fit

So how do we do this? We’ve got a syndication that’s for – you’ve decided to start looking for properties, you’ve got your fit. And your fit is, basically what you’re looking for is medium to low risk properties.

You’re looking at mixed use or retail components in B, C, or possibly D areas, with a moderate to low risk profile and a total cost between $3 million and $5 million. This is the scenario we’re working with.

So let’s start with the fit:

Funnel Stage One: Identifying Candidate Properties

So to do this, you do a survey of the area and you identify three properties.

We have:

These are properties that made it into your initial funnel based on surface-level screening.

Evaluating Risk, Strategy, and Hold Period

Just to remind us, we’re talking about complexity versus time. Higher complexity generally means higher risk.

Zapier, despite being a cash-flow asset, carries significant risk due to location and tenant dynamics.

Selecting the Right Deal for the Strategy

After discussion, Wilson emerges as the best fit—not because it’s the highest return, but because it aligns with the stated risk profile.

The key lesson: a great deal that doesn’t match your founder investment theory is the wrong deal.

If you’ve cultivated investors expecting moderate risk, introducing a high-risk development undermines credibility and conversion.

Transitioning From Selection to Underwriting

So now you’ve identified the property. Next, you move through:

  1. Founder investment theory fit
  2. Basic underwriting
  3. Investor surveying

Only after all three do you move forward.

High-Level Underwriting and Capital Structure

Now we move into underwriting.

Equity is raised at $1,000 per share, with:

Projected IRR: 18.7%, high but still defensible for moderate risk.

Commitment: Locking Up the Deal

Once the deal is selected, the next step is commitment.

Typically, this means:

If the syndicator doesn’t have the cash:

Either approach must be structured carefully and transparently.

Two Parallel Paths: Syndication and Transaction

From here, two paths run simultaneously:

Transaction Path

Syndication Path

Time is critical—this is a sprint.

Choosing the SEC Exemption and Preparing the PPM

For this scenario, Reg D Rule 506(c) is chosen because advertising is required.

Even though a PPM is technically optional under 506(c), not using one is a serious mistake.

The PPM:

The operating agreement governs the entity, while the subscription agreement binds investors to it.

Marketing, Investor Target Lock, and Capital Raising

With documents in place, capital raising begins.

Investors come from:

The goal is to reach investor target lock—verbal commitment to invest.

The process:

  1. Communicate opportunity
  2. Capture permission to discuss
  3. Convert interest to commitment

Accreditation, Funding, and Confirmation

Under 506(c), investors must be verified as accredited by a third party.

Steps:

  1. Accreditation
  2. Wire funds
  3. Confirm receipt and position

Clear communication at this stage is critical to investor confidence.

Funding Escrow and Closing the Transaction

As capital accumulates:

This completes the process: from deal identification to funded close.

Final Reflection and What Comes Next

This walkthrough is designed to show the entire forest before diving into the trees.

Next steps include:

The goal is clarity, repeatability, and confidence—for both sponsors and investors.