Commercial property syndicates

The good news is that I have finally found a tenant for my office after a long wait. The bad news is that the lease is only for 12 months because the tenants are building new premises and need temporary accommodation in the meantime.

I think it will always be difficult to attract new tenants because the office does not have good exposure to the main road and it is D grade.

I have been on a steep learning curve since I purchased it 3 years ago but I am beginning to think that entry level commerical property investing (under 500k) is not worthwhile because of the risks involved.

In six months I will put it on the market for sale or lease but I am now turning my attention to commercial property syndicates which purchase larger properties for better and more secure return.

Does anyone have personal experience of syndicates that they would like to share or can anyone recommend syndicate opportunities for a newbie?
 
The profit & returns exist for the syndicator who creams management fees, establishment fees, syndication costs ...... all at the expense of the investors.

Tread wearily & carry a big stick.
 
My thinking would that it is very inflexible to invest with / in a syndicate.

As mentioned those who organise the syndicate are doing so to profit by the fees able to be charged and all those fees will no doubt cut substantially into any returns.

At least now you can decide to stay invested or get out once in a syndicate you likely can not make that decision or if you can it will be at a substantial penalty cost.

Cheers
 
this is like buying managed fund.. and you have no control over what happen.

The good news is that I have finally found a tenant for my office after a long wait. The bad news is that the lease is only for 12 months because the tenants are building new premises and need temporary accommodation in the meantime.

I think it will always be difficult to attract new tenants because the office does not have good exposure to the main road and it is D grade.

I have been on a steep learning curve since I purchased it 3 years ago but I am beginning to think that entry level commerical property investing (under 500k) is not worthwhile because of the risks involved.

In six months I will put it on the market for sale or lease but I am now turning my attention to commercial property syndicates which purchase larger properties for better and more secure return.

Does anyone have personal experience of syndicates that they would like to share or can anyone recommend syndicate opportunities for a newbie?
 
I find them very appealing - once you already have a good amount of equity.

My main problem with them (that most people don't realise) is that (from my understanding) you cannot borrow against equity gains for further investment, reducing your ability to replicate.
 
I find them very appealing - once you already have a good amount of equity.

My main problem with them (that most people don't realise) is that (from my understanding) you cannot borrow against equity gains for further investment, reducing your ability to replicate.

Not individually, but the syndicate as a whole may agree to do this.
 
My brother has just started up a syndicate. Its a slightly different structure to most of them, and as the syndicators - they dont take any fees but rather they take an active interest in the property.

Its a bit of a different design and appeals to 'hands off' investors (doctors, lawyers etc) who have cash, but not the time/effort/inclination to spend on 'managing' all that cash.

I guess it suits some people. Effectively some people have the cash but not the time, others have the time but not the cash.

From what I can see it has worked pretty well for all involved.

But yeah, once in, its hard to recover your money, its long term investment (in my brothers case) and you cant leverage off any gains.

Personally I would tread carefully.

Regards
Blacky
 
exit strategy

I think syndicates are a bit like a partnership , sometimes very easy to get into but hard to get out of. Make sure that you all agree on an exit strategy.
 
there is a couple of buyers agents in melb that i have seen that do them, i saw they bought a property, might have been albury/ wodonga or something like that, rented to bunnings for 15 years.

they borrowed i think at 40-50% and you had to be interviewed and meet certain criteria to be able to join.

would be interesting to hear what dazz actually thought of the deal, i might try and find the ad or prospectus and post it
 
there is a couple of buyers agents in melb that i have seen that do them, i saw they bought a property, might have been albury/ wodonga or something like that, rented to bunnings for 15 years.

they borrowed i think at 40-50% and you had to be interviewed and meet certain criteria to be able to join.

would be interesting to hear what dazz actually thought of the deal, i might try and find the ad or prospectus and post it

I know this group Bigtone. In general I like their stuff, however as I mentioned before the fact I can't releverage this into new investments holds me back from these.
 
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