How Much Money Should You Start Investing in Syndications?

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So another question here in one of your podcasts or investors calls you had recommended not to deploy more than $250,000 in a year. Is there any checks reason for this. I don’t remember the context of this. I think what I was getting at a lot of investors don’t need that rich debt or that book, that purple book that is the red pill of finance for a lot of people.

 

And they’re like, oh my God, I got to get out of this like crap and investing in for all my life. And they go bonkers. They’re going into all these alternative investment, private placements and syndication deals. And I’ve had people that invested half a million, million dollars at nine months. I personally am.

 

Whoa. That’s a lot of them investing because the thing is let’s heart about syndications. Anybody can put one together, right? Anybody can invest in it, but like in terms of putting them together, anybody can do it. You just pay $30,000, supposedly you can magically do it. So I say that jokingly, because. Not everybody should do it.

 

And I sure as heck am going to invest in those deals, but those sponsors, how do you determine who’s legit? It’s really hard to determine who’s legit. And if it were me, I would take the approach of putting my money in going with the minimum and seeing how it works, call me crazy. But I think that’s a prudent strategy, especially when a lot of people that come into our group, they’ve been investing in the regular 401k stuff that traditional.

 

Investing model for 10, maybe even 40 years, we have a huge range of ages in our group. Don’t throw it away on some bozo who you just met. I just, today someone just mentioned that, yeah, they lost a hundred thousand dollars investing with this other sponsor and they’re happy that they found this, but that takes some luck.

 

And I think to really feel confident to going that you’re putting your money with good stewards is to build your network with other passive investors. So that you feel comfortable knowing that other people have had good success in the past, but likely. Yeah, a lot of us and myself included, we don’t have any people who are investing in these types of options, the investments, most of the people that we associate with or go to work with, or our families or parents just invest in the traditional mainstream retail stuff.

 

So we don’t have that network. But what I’m saying is that’s why we created simple passive cashflow. So that if there is an opportunity to find like-minded individuals and you do. That’s when magic flip things happen. And if you want to stop screwing around, that’s where you joined the family office, Ohana mastermind the fault.

 

I’m just saying, but I think that’s the way into it. And maybe I slid the $250,000 in one year thing. I think maybe where that came from was like, maybe you can go onto a handful of deals in that first year with, you know, minimal investments being anywhere from 50 to a hundred thousand dollars. So you could go onto a few deals and you can sit and wait and watch, see how the sponsor performs.

 

Did they run off with your money to Mexico? They say that they’re going to do it. Quarterly distributions are when they said it was going to, so that would be the way I would do it. When I started to buy rental properties, I bought my first three in Seattle and my big first pivot point as an investor was investing site and scene.

 

In Birmingham and left Indianapolis 2012, 13, what did I do? I bought one property in Birmingham. I see how it worked. I pause for six months to a year, and then, you know what the damn thing works. So I’m loaded. I unloaded all those Seattle properties that have poor cash flow. And I went into and parlayed my money into those other investments.

 

So to me, I’m not saying that you’re going to do this, but I like the approach of getting proof of concept and then going all of that.

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