Syndication vs DIY

Syndication vs DIY

Last year, during the summer I decided to make my own DIY pallet board planter (I’m sure you’ve seen these posted all over the internet). It didn’t turn out as I had initially imagined it but it was still a rewarding experience.

The DIY movement has taken off and has spilled over into investing. Have you ever wondered if it is better to do it yourself when investing in multifamily apartment communities or to invest with a team via syndication? Here are some pros and cons of each choice.

Pros: Syndication

There are many hurdles to overcome to start investing in real estate such as education, capital, finding deals and your own mindset.

One of the greatest benefits of syndication is that it lowers the barrier to entry into one real estate investing’s most stable recession resistant assets, Multifamily apartment communities. Syndications offer you the opportunity to invest actively or passively.

If you are a passive investor all you need is the capital to invest. This amount can be as little as a few hundred dollars if you are investing via a crowd funding platform such as fundrise.

If you are an active investor you are able to partner with other active investors. This allows you to focus on one skill, and share the workload with your teammates. Having fewer responsibilities or needing less capital lowers the barrier to entry.

Diversification. Because you are using smaller amount of your resources whether that be capital or time you are able to invest in more assets. Instead of taking $100,000 and buying one property you can split that into $25-$50,000 investments.

And not only will these be in multiple properties, they will be in higher quality, more stable assets than what you could afford with just a $100,000.

Higher quality assets- Syndications pool funds together from multiple investors. Having this larger pool of funds allows you to acquire larger assets. These larger assets are higher in quality due to economies of scale.