Crowdfunding Platforms v Syndicators

Dear Investor,

When it comes to investing in a very large real estate property, the "more the merrier," right? Actually, often just the opposite can be true as you are just one of thousands of investors waiting for dividends, waiting for disbursements, waiting for K1s…just waiting.

As the private real estate landscape evolves, there is some confusion about the difference between multifamily syndicators and multifamily syndication platforms. Syndicators (also known as sponsors) usually seek out a select few hundred investors for investments of $50,000 or more. Multifamily syndication platforms, (also known as crowdfunding platforms) want everyone to invest with as little as $100.

Crowdfunding (or syndication) platforms are online, two-way marketplaces that bring together sponsors and investors. The platforms serve as intermediaries: they advertise opportunities to invest in real estate assets and funds, manage regulatory issues, and collect funds from individual investors on behalf of sponsors. Crowdfunding sites aim to make private real estate investments more accessible to the average individuals—a worthy goal. Real estate crowdfunding is beneficial in the sense that it removes barriers for more members of the general public to invest in real estate. For some, it's the simplest way to passively invest in real estate.

However, crowdfunding isn't necessarily the right real estate strategy for larger investor. Crowdfunding platforms present a wide range of products, structures, terms, and fees. Moreover, the platforms feature sponsors and assets of varying quality. And then there's the issue of economies of scale. Still, whether you've invested $100 or $1 Million, your phone call "will be answered in the order it was received" to paraphrase every automated voice assistant.

(Full disclosure: We have an advertising relationship with Trion Properties we're about to tell you about, meaning we get paid for making this introduction and sharing this content. Please consider this an introduction and not a recommendation. And as always, be sure to do your own due diligence when looking at this or any other investment opportunity.)

Syndicators, on the other hand, raise capital from fewer sources. The result is "white glove" service to investors to who provide passive investments in larger, yet manageable slices. Given that multifamily properties often cost millions of dollars to acquire and demand intensive management, syndication is an understandably popular way for individual investors to add multifamily real estate exposure to their portfolios without the added fees, added wait times, and they are more likely to pick up their cell phones rather than direct your call.

Trion Properties is a real estate sponsor for multifamily properties only. Investors can invest directly in a property, a fund, or both — there are no intermediaries. As a result, you don't pay platform fees to any middlemen. They communicate directly with potential investors and existing LPs about our investment strategy, track record and current opportunities. It provides investors with detailed reports featuring key metrics and qualitative updates. Perhaps it's the high level of personal service that many investors seek that sets Trion Properties apart from others? Or maybe it's their stellar track record over good markets and bad?

If you're interested in learning more about Trion Properties and our approach to multifamily real estate investing, we invite you to reach out to them by phone or email.

Click here to learn more about Trion Properties

Thanks for being a white coat investor,

Jim and Brett

James M. Dahle, MD, FACEP
Founder, The White Coat Investor

Brett Stevens, MBA
COO, The White Coat Investor

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