How Much Can You Make with Real Estate Syndication?
By Michelle Clardie on 03/03/2025.
Reviewed by Josefin Gatsby
Real estate syndication is proven to be highly lucrative, often returning rates of 7-12% in average annualized returns (according to multiple sources, including Forbes and Equity Multiple). But some syndication investors are consistently earning double-digit returns, often 15% or more!
In this article, we’ll explain how much you can make with real estate syndication and provide tips to help you maximize your returns.
Every detail of the project is professionally managed by a real estate sponsor, who scouts potential deals, arranges funding, secures the property, coordinates vendors, supervises construction/renovations, and disburses funds back to investors. This makes your syndication investment 100% passive!
Why Real Estate Syndication Provides Strong Return Potential
There are many reasons why real estate syndication projects often outperform the market.
You can Access Unique Deals That Aren’t Available to Individual Investors
High-reward opportunistic investments (like building multi-family structures from the ground up, for example) are difficult for any investor to manage on their own. The upfront cost, time, skill, and connections required create an insurmountable barrier to entry.
But with syndication, you can partner with a sponsor who already has the systems and network in place to complete these projects successfully.
You Can Lean on Your Sponsor’s Experience, Skill, and Knowledge
An experienced sponsor knows what works in their market. They understand renter/buyer demand and tailor projects to meet that demand. Leveraging their expertise reduces your risk while maximizing return potential.
Plus, some syndication companies only earn their fee when the project creates positive returns for investors. This alignment of interests means sponsors are actively working to maximize your returns.
Your Sponsor May Have Contacts that Can Reduce Costs
A good syndication sponsor has a network of industry professionals who can help them get better deals for their investors. For example:
Relationships with local real estate agents can help sponsors find off-market deals at below-market prices.
Relationships with local lenders can help sponsors secure favorable financing terms
Contractors may be willing to offer discounts for sponsors who hire them for multiple deals.
Sponsors who do multiple deals per year may benefit from bulk pricing on materials and supplies.
These cost-saving measures save money and increase profit margins without impacting the quality of the product.
Depending on the specific syndication project(s) you choose, you could financially benefit from cash flow, appreciation, or both.
New developments and flips, for example, force quick appreciation by adding value. The completed project should be worth substantially more than the sum of the project’s costs. A turn-key apartment rental, on the other hand, may offer consistent cash flow in terms of rental income, but may not appreciate as quickly.
Some syndication projects create the best of both worlds by offering both a value-add phase and a rental phase. For example, Gatsby Investment’s unique Multi-Family Built-to-Rent forces immediate appreciation by developing a new multi-family building from the ground up, and then stabilizes the new property with well-qualified tenants to provide passive income for investors. For an added investor benefit, the stabilized property can often be refinanced with a cash-out refi to return the initial capital to investors so they can put that money into a new syndication deal!
Factors That Influence How Much You Can Make with Real Estate Syndication
The rate of return for real estate syndication varies based on a number of factors including:
Market conditions. Supply and demand, interest rates, and local housing regulations can all affect the return potential for real estate syndication projects.
Property type. Some property types offer higher return potential than others. And this can change as market conditions shift. For example, flips may perform well in hot seller’s markets while built-to-rent models may work better in slower seller’s markets.
Duration of the investment. Return potential can vary depending on how long the investment is held. Rather than comparing investment opportunities based on total ROI, consider their average annualized return potential to see which opportunity performs better on a per-year basis.
The performance of your syndication sponsor. A good sponsor knows how to find the highest-potential deals and maximize their returns under any market conditions.
How Much Can You Make with Real Estate Syndication?
So, how much can you make with real estate syndication, given the variables listed above?
On average, real estate syndication investors will earn somewhere between 7-12%. However, working with a reliable syndication sponsor, like Gatsby Investment, can boost your returns into the 10-20% range.
Under strong market conditions, returns can exceed 20% with the right syndication sponsor. In fact, in four out of the last eight years, those who invested in real estate syndication with Gatsby saw average annualized returns over 20%!
If you want to know how much you can make with real estate syndication under current market conditions, use the Investment ROI Calculator, available for each of Gatsby’s real estate investment opportunities. Simply click on “View Details” for any of the Open Investments to see a calculator like this:
Example of a Real-World Real Estate Syndication Return
Here is an example of a real-world syndication project completed in 2024. These are the financial results for Gatsby Investment’s Multi-Family Development #63A:
Despite slower-than-expected market conditions in 2024 and supply chain issues that caused project delays, Gatsby still managed to provide an annualized return of 15.79% for investors!
How to Maximize Your Real Estate Syndication Returns
The best way to make more money with real estate syndication is to choose your syndication sponsor carefully. Gatsby Investment is among the most reliable syndication companies in operation.
Additionally, you can maximize your syndication returns by:
Choosing opportunities with strong ROI projections.
Reinvesting your proceeds into new syndication deals for compounding returns.
Investing early in the syndication cycle. As an early investor, you may be able to buy a higher percentage of the deal, increasing the amount returned.
How Gatsby Averages 22% Annualized Returns for Syndication Investors
Since being founded in 2016 through 2024, Gatsby Investment has provided average annualized returns of 22% for investors! Offering a range of investment opportunities, tailored to capitalize on ever-changing market conditions, Gatsby’s goal is to help you make money from real estate syndication while supporting much-needed new development in Los Angeles.
Gatsby’s dedicated team of investor relations specialists is happy to answer any questions you may have about investing in syndication. Simply schedule a time to chat with an expert about your investment goals.
Welcome to the Gatsby AI assistant. I am here to answer your questions about investing, our investment products or other helpful information about our company.
