Anyone ever been involved in a residential property syndicate among friends before ?

Has anyone ever been involved in a syndicate among friends before ? Specifically for residential property ?

If so - what were the main headaches of such an operation?

Me and some of my friends are thinking of doing one for some high-end prime London residential.
Seems to be booming !!
A couple of them are solicitors which should be useful (I'd imagine !! - perhaps a conflict of interest !!).

What potential nightmares could lie ahead for us?
Or is it easy enough?

There would be about 10 in our syndicate.

Re: Residential syndicate

We set up syndicates for investors becuase this is a very good way for investors to become involved in bigger and higher end investments. There are also good economies of scale to be head in terms of sharing the cost. It can also be a case of safety in numbers.

The best syndicates that seem to work are small one so it seems to me be the biggest headaches you are going to have with 10 people (which is quite big) is everyone agreeing which area to buy in and which property to buy. The other is a timescale for your exit strategy, because all your money is going to be tied up you need to agree how long it will be for, obviously to some extent this will depend on market conditions, but this is to stop any one member of the syndicate pulling the plug in a couple of years because he needs his money. I would suggest appointing two or three people to handle sourcing, agree a search area to focus on and a remit for the types of properties/buildings you are going to look at with the group beforehand. Make sure you get everything sown up water tight legally in respect of the make up of the syndicate and take tax advice on the best structure to use eg special separate company for the syndicate.


Good luck,

Simon.

Re: Anyone ever been involved in a resedential property syndicate among friends before ?

qwertyuiop - to my knowledge only 4 of the syndicates names can go on the contracts of the property unless you have set up a company through which you are purchasing the property. There are some tax advantages of going down this later route which would be worth getting advice on.

If you do go down the route of purchasing as individuals, you'll need to have a side agreement with the rest of your group listing the owners, outlining what share each of you have in the property(s), your investment goals, timescales involved in terms of exit strategy and the like.
It's sounds like a good way to go to get a slice of the high growth still projected for the prime London residential market however.

Good luck with it,