If you’ve ever invested in a mutual fund, you’re already familiar with the idea of pooling money with others to gain access to bigger, often better opportunities. Real estate syndications operate on a similar premise—but instead of buying shares in a company, you’re buying into a piece of income-producing property.
But who exactly is running the show? And who’s along for the ride? Let’s break down the key players in a real estate syndication, what they do, and why it matters to you as an investor.
1. The Sponsor (aka the Operator or General Partner)
Think of the sponsor as the quarterback. They find the property, negotiate the deal, secure the financing, and manage the investment from start to finish. In short, they do the heavy lifting.
Responsibilities include:
- Sourcing and analyzing deals
- Arranging financing (debt and equity)
- Overseeing business plans and renovations
- Managing property managers
- Communicating with investors
Why you should care: This person or team directly impacts the success of the deal. You’re betting as much on them as on the property itself.
2. The Limited Partners (LPs)
These are the passive investors—possibly you. Limited partners provide the capital and in return, receive a share of the profits. Profits come from operating the property (cash flow), and through appreciation upon sale of the property. In addition, since LPs have ownership, they get depreciation, which reduces their taxes. LPs have limited liability and zero day-to-day responsibilities.
Think of LPs as shareholders in a private real estate venture. You’re not running the show, but you are entitled to a piece of the results.
Why you should care: Your job is to vet the sponsor and the deal before you invest. After that, your role is mainly to collect distributions and stay informed.
3. The Property Manager
The sponsor hires this team to handle the daily grind—rent collection, maintenance, leasing, and tenant issues. A good property manager keeps tenants happy and revenue flowing.
Why you should care: Even a great property can underperform with the wrong manager. Ask the sponsor about their property management strategy and track record.
4. The Lender
Unless the deal is all-cash (rare), there’s a lender providing the mortgage. Lenders don’t have equity in the deal, but they do have a say. Their terms, interest rates, and timelines all influence the investment’s risk and return profile.
Why you should care: More debt means more leverage—but also more risk. Make sure you understand the financing structure.
5. The Legal and Accounting Teams
These folks operate behind the scenes, drafting documents, filing paperwork, setting up the entity structure, and making sure tax reporting goes smoothly.
Why you should care: You want a syndication that’s professionally structured and legally sound. Ask whether the sponsor uses experienced counsel and CPAs familiar with real estate partnerships.
Wrapping It Up
When you invest in a syndication, you’re part of a team—even if you never attend a single meeting. The sponsor runs the deal, the LPs provide the capital, the property manager handles the operations, and the lender sets the financial playing field.
Your job as an investor is to understand the team, vet the people involved, and decide whether you’re comfortable letting them put your capital to work. Just like you wouldn’t hand your mutual fund money to an unknown manager, you shouldn’t invest in a real estate syndication without knowing who’s in the driver’s seat.
Win Coleman, CCIM, is a graduate of East Carolina University where he received his bachelor’s degree in finance. He holds both North Carolina and South Carolina Real Estate Licenses and was awarded the prestigious CCIM (Certified Commercial Investment Member) designation in 2008.
Win served on the board of directors of The Triangle Apartment Association (TAA) where he co-chaired The Independent Rental Owner’s Council (IROC). He is a member of the International Council of Shopping Centers (ICSC), the Triangle Commercial Association of Realtors (TCAR) and the Raleigh Kiwanis Club.
While a specialist in site identification, evaluation and acquisition for investors and businesses, he also has extensive experience in brokerage, leasing, property management and investment sales.
Win assists in managing The Coleman Group, LLC, which owns a portfolio of investment properties, and he is a member of our acquisitions committee. He has lifelong experience and love for historic properties including the one he restored and where he resides in Historic Oakwood in Downtown Raleigh.