Originally Posted by Gunfighter

The minimum barrier to entry makes the offering more efficient. One investor on the Schedule A with 100K is much easier for the syndicator to manage than 10 investors with 10K. The crowdfunding platforms automate much of the legally required disclosures and communication, but it is still more efficient to manage a smaller list of large investors than a large list of smaller investors.



As a follow on thought, if 50K is a "high cost of entry" there may be better alternatives right now. Syndications are good when you have north of 6 figures of investable capital. That allows you to participate in multiple offerings with different time horizons and risk factors. When working with less than 6 figures, an option for accelerated growth of net worth is with single family rentals. It can be done with minimal sweat equity if you can manage a team of independent contractors and leverage readily available technology. Once you have enough equity in a handful of properties, sell them all and move to larger more passive investments.



If you have a large amount of investable capital trapped in retirement accounts, a self-directed IRA may be an option. If you are married and want to roll money from your Delta plan into a SDIRA, look into a QDRO.



Syndications will make the stock market look like bumper bowling. There are no safety rails on the investments. Some have caps on investor returns, so a homerun investment benefits the syndicator more than the investors. Offerings for debt, preferred returns and hurdle rates generally favor the syndicator. Offerings with a straight profit split or carried interest from SFC-Unlimited are generally better for the investors. Also look for fees like acquisition fee, refi fee, construction fee, disposition fee, management fee, etc. Some syndicators are strictly in the business of collecting fees and don't even invest in their own offerings. DYODD, YMMV, and for goodness sake get some professional advice and education.

Originally Posted by Gunfighter

The minimum barrier to entry makes the offering more efficient. One investor on the Schedule A with 100K is much easier for the syndicator to manage than 10 investors with 10K. The crowdfunding platforms automate much of the legally required disclosures and communication, but it is still more efficient to manage a smaller list of large investors than a large list of smaller investors.



As a follow on thought, if 50K is a "high cost of entry" there may be better alternatives right now. Syndications are good when you have north of 6 figures of investable capital. That allows you to participate in multiple offerings with different time horizons and risk factors. When working with less than 6 figures, an option for accelerated growth of net worth is with single family rentals. It can be done with minimal sweat equity if you can manage a team of independent contractors and leverage readily available technology. Once you have enough equity in a handful of properties, sell them all and move to larger more passive investments.



If you have a large amount of investable capital trapped in retirement accounts, a self-directed IRA may be an option. If you are married and want to roll money from your Delta plan into a SDIRA, look into a QDRO.



Syndications will make the stock market look like bumper bowling. There are no safety rails on the investments. Some have caps on investor returns, so a homerun investment benefits the syndicator more than the investors. Offerings for debt, preferred returns and hurdle rates generally favor the syndicator. Offerings with a straight profit split or carried interest from SFC-Unlimited are generally better for the investors. Also look for fees like acquisition fee, refi fee, construction fee, disposition fee, management fee, etc. Some syndicators are strictly in the business of collecting fees and don't even invest in their own offerings. DYODD, YMMV, and for goodness sake get some professional advice and education.