This article explores what the future of real estate syndication holds. And, more importantly, how all of this will affect you as a home buyer or seller.
To kick things off, it’s important to note that some of the trends we’re seeing today have solidified themselves as the new industry standard.
On top of that, they’ve also provided us with a glimpse into what’s there for the real estate industry in coming years. So, what trends are we talking about?
Multifamily Condos in Real Estate Syndication
The rise of the multifamily condo market is quite obvious. At the moment, around 10% of all condos in major metropolitan areas are being bought by investors. This is partly due to the introduction of ‘condo-in-a-box’, a new type of prefabricated condo with standardized design and assembly. These ‘condo-in-a-box’ units are constructed in one piece on a factory floor, so an actual condo building is not being constructed. As a result, these condos are cheaper to build and there is no need for expensive tradesmen .
However, the downside is that these condos are typically sold at deep discounts, which are often covered by the investors. A single unit of a condo -in-a-box typically costs around $50,000 to build. However, the developers are selling these units for as low as $129,000 to as high as $199,000. It is hard to believe that the developers can sell these units so cheaply, since they are essentially building them on their own dime.
What is the Future of Real Estate Syndication Technology?
Real estate syndication is a relatively new concept that has not yet been fully developed. Today, the best way to sell shares in a property is to ask your friends for money. Real Estate syndication technology will allow people to easily invest in properties without meeting the borrower or lender in person. With access to credit scoring systems, potential investors can make better decisions about how much risk they are willing to take on.
Investing in real estate isn’t easy, but technologies like AI and blockchain make it easier to manage risk and make more rational decisions about when and where to invest.
Real estate syndication is an emerging trend in the market, but it’s not for everyone. It’s important to understand the benefits and drawbacks before jumping in feet-first. Their time horizon, risk tolerance level, and investment goals will be different for each investor.
However, you won’t know unless you try. Real estate syndication opportunities may benefit your portfolio and your investment strategy. If it does, then you have nothing to lose.