Real Estate Syndication
Also called: property syndicate, sponsor deal, private real estate fund
A syndication pools investor money to buy a property too large for any of them alone, with a sponsor finding, financing and managing it while passive investors supply most of the equity. Returns are split through a waterfall that pays investors a preferred return before the sponsor's promote. The passive investor's real diligence is on the sponsor's track record, since they control every decision after the wire clears.