PARTNERSHIPS & DEAL STRUCTURE
Partnerships & Deal Structure
What is a general partner?
In multifamily syndication, the general partner (GP) is an individual or group responsible for
leading and managing the real estate investment deal. The GP is the sponsor or syndicator
of the multifamily investment and plays a crucial role in the entire investment process.
Here are the key responsibilities and roles of the general partner in a multifamily
- The GP is responsible for identifying potential multifamily investment opportunities that align with the investment strategy and meet the specified criteria. They conduct market research, perform due diligence on properties, and assess the feasibility of each deal.
- Once the GP identifies a suitable multifamily property, they negotiate the deal terms with the seller or property owner. This includes determining the purchase price, financing options, and other key aspects of the transaction.
- The GP’s role includes raising the necessary capital to fund the acquisition and operation of the multifamily property. They bring together a group of limited partners (LPs) who passively invest in the deal to provide the majority of the equity required.
- As the syndicator, the GP creates a private placement offering or syndication for the multifamily investment, outlining the terms, investment structure, and potential returns for the LPs. They present this offering to potential investors to secure their commitments.
- The GP oversees the day-to-day management of the multifamily property. This includes working with property managers, maintenance, and ensuring the property operates efficiently. The asset manager is the “orchestra conductor” that keeps everyone working in concert towards achieving the targets.