The private real estate syndicate investor's investment tendencies and practices : a particular aspect of the real estate syndication process

Abstract

Despite the emergence of real estate syndication during the last 30 years as a viable source of risk capital for real estate ventures, little is known about the syndicate investors and how they reach their investment decisions. There has been considerable speculation that syndicate investors are generally members of the professional groups such as medical doctors, lawyers, et cetera, and that one of their prime motives, if not the prime motive, for investing is related to tax considerations and consequences. This study examined the process by which individual investors in real estate syndications in Brazos County, Texas, identified, evaluated, and structured their investment in real estate syndications and their involvement in investor communication networks. The investors' investment tendencies were explored as they related to such personal characteristics as age, education level, occupation, and place and length of residence. Factors influencing the investor's investment decision were discussed as well as elements of the syndicate deal itself. Also discussed, were the investors' expectations about their investments, their opportunities to invest in real estate syndications and in real estate in general, the extent of their actual investment in syndicates and in real estate in general, and their involvement in and dynamics of investor information networks..