If you’ve ever wondered how much money you can actually make as a real estate syndicator, I’m about to break it down for you—real numbers, from my first deal, how much I made, where the money came from, and how this could scale over five years. And trust me, the numbers might surprise you!
This is the kind of thing you don’t hear talked about much, but today, I’m laying it all out—real numbers, no fluff. Let’s get into it.
I’m going to take you through my first deal ever and show you step by step how the income adds up over time. And let me tell you—when you see how this scales over a few years, it might blow your mind!
Before we dive in, I want to be really clear—this article is for educational and informational purposes only. The numbers and examples I’m sharing are based on my own personal experience with real estate syndication, but every deal is different. Your results may vary depending on factors like deal size, structure, market conditions, financing terms, and execution strategy.
This is not financial, legal, or investment advice. I’m not guaranteeing any specific returns, and real estate investing always carries risks. Before making any investment decisions, I strongly recommend that you consult with qualified professionals—that means a real estate attorney, CPA, and financial advisor—to make sure you fully understand the risks and rewards based on your unique situation.
As with any investment, do your own due diligence and make informed decisions.
How a Syndicator Gets Paid
Alright, let’s start with my very first syndication deal. This was a 132-unit portfolio of 2 properties in Lawrence, Kansas that we bought for 9.9 million dollars. To make the math super simple, will call it 10 Million. We raised about 3 million from investors, and we took a loan for the rest—about 7 million.
Now, as a syndicator – also refered to as a Sponsor or a GP (which stands for general partner), there are a few key ways we get paid.
Acquisition Fees – This is a percentage of the purchase price of the property. Typically, this is 1-3% of purchase price of the property. Since this was my first deal, I actually didn’t take any acquisition fee. This doesn’t mean you couldn’t or shouldn’t take an acquisition fee on your first deal, there are many who do. I’m just sharing exactly how my first deal went down. In most of my deals now, I take a 2% acquisition fee.
While we are operating the property, there are two types of income for syndicators.
Asset Management Fees – This is a percentage of the income collected from the property on a monthly basis. Typically, this is 1-3% of the collection of rent and any other income the property generates. On this deal, I took 1.5% of the income – nowadays I typically take 2%.
Cash Flow Split – After all expenses are paid, a good deal should have profits from the operations of the property. This is the cash flow and gets sent out to all the partners in the deal based on the structure you’ve set up for the company. Industry standard is that the GP team will receive about 20% to 30% – though I have seen deals where the GPs get 50%. On my first deal, we took 17%.
Lastly, when we sell the property, sponsors get paid based on their equity in the deal.
Equity – sometimes refered to as “carried interest” is the portion of ownership in the property that syndicators earn for putting the deal together, operating it, and then the sale of the property. Syndicators can get rewarded very well for successful deals that make money for the investors. The profit that is generated from the deal get split among the investors and syndicators based on the terms set forth at the beginning of the deal and – just like cash flow – are typically 20% to 30%. One thing to note here, sometimes syndicators set up certain thresholds where if the returns go above certain targets, they get paid even more. While I do set up these “waterfalls” and usually take at least 30% on most of my current deals, We didn’t do that on my first deal and we took just 17%.
There are other fees that syndicators can take such disposition fees or capital event fees. These are usually between 1% to 3% of the sales price or refinance amount. We didn’t take any fees for this on my first deal. For that first deal – the one in Kansas – I had one partner and we split everything 50/50. I am going to share with you now, the actual income that I made. So the fees paid to the sponsorship team were actually twice the amounts I am stating here – this is what my portion of the fees was.
Income Breakdown
In Year 1, I made $18,586 from asset management and $15,780 from cash flow for a total of $34,666 from this deal. In Year 2, as we improved operations and increased income, my share of the cash flow and asset management grew to $58,504.”
A little after the second year of operations we decided to sell the property. There is more to that story which I’ll share in another article – or you can check out all the details on this first deal in my book.
It was the beginning of COVID and we had some nice profits on the table and we were ahead of our business plan. If we would have held on to the property for the full 5 years, instead of selling after just 2 years, and we continued our business plan we would have made more profits. But with the uncertainty of COVID, the sponsors and all of our investors discussed it and decided the best move was to sell, take our profits, and remove any risk.
After the sale was complete, I earned an additional $138,260. If we had held the property for a full 5 years, I would have received about $300k, but I was happy to receive about half of that in less than half the time.
Looking at my first deal as a whole, I earned $231,130 from asset management, cash flow and my sponsor portion of equity in the deal. I also invested my own money in the deal and made the same profit as the other investors in the deal, but I am not including that in this calculation.
Had we held the property for the full five years, I would have made at least $60k per year from operations, adding another $180K and $150k at sale, for a grand total over $550,000.
How One Deal Per Year Can Change Your Life
Now, that’s pretty good for a first deal that we only held for about 2 years. Plus, we gave the investors a great returns and remember the fees we took were substantially below industry norms.
But how can a syndication business grow over time?
That’s where things get really interesting… because when you start stacking deals, year over year, this business model compounds like crazy! Remember Albert Einstien said compounding is the 8th wonder of the world.
Your first deal is the hardest. But after that? Brokers take you seriously, lenders take you seriously, and investors can start coming to YOU instead of the other way around.
Let’s look at a realistic breakdown if you do just one syndication per year for the next five years. For this example, we are going to say that each deal is set up similar to my very first deal. A 10 million dollar deal, with two sponsors. We will figure 20% split on the equity and a 2% acquisition fee but only starting on our third deal because that’s how I grew my business.
We will assume that the asset managent and cash flow from each deal stays the same each year at $35,000. Remember my first deal it was at $34,666 in the first year and grew to nearly $60k in year two.
In year one, we acquire the first property and generate $35,000 income for ourselves.
In the second year, we repeat that, buy a second property and generate $70,000.
In year three, we take our first acquisiton fee of the property we purchase. It is 2% of the 10 million dollar purchase price, which is $200k and we split it with our partner so we each get $100k. This year we now have $105,000 from asset management and cash flow of the 3 properties giving us a total of $205,000 for the year.
We repeat this in year 4, generating $100k from our acquisition fee and $140,000 from operations for a total of $240,000 – not too shabby.
In year 5, we do the same except this is where our model has us selling our first property. On a 10 million dollar deal, we would have around 3Million in equity. If we double that equity – which is our typical business plan – and we take just 20% of that, we have $600k for the sponsor team – giving us $300k. We add to that a $100k acquisition fee from a new purchase and a total of $175,000 in operations of the 5 properties we have in our portfolio. This year we generate $575,000.
At this point, if we continue to acquire just one 10million dollar property each year, and operate them well, we can consistently earn over half a million dollars each year.
This is why I always say—real estate syndication is a long-term game. You’re not going to get rich overnight, but if you play it smart, keep stacking deals, and make sure they are performing well, by year five, you could be making over $500K per year. If you can acquire more that just one property per year, change the splits, or if the purchase price of those properties change, then our income will change too.
If you’re ready to take control of your financial future and dive deeper into multifamily investing, explore my coaching services at Scaling Up With Syndication.com. Together, we can transform your real estate aspirations into reality.