Are real estate syndicators con-men?

A real estate syndication works by allowing investors to pool their money together into a single investment. However, the syndicator investors are limited partners with little to no say in how the money is spent or invested. In contrast, the syndicators themselves collect acquisition fees of 2% to 5% of any apartment building they purchase. In addition, they get to collect 2% to 3% from the buildings gross income annually. Even when the investment fails syndicators get to make money. All of these factors lead real estate syndicators to take excessive risks at the expense of their syndicator investors.
There is a former car salesman named Grant Cardone that has 4.3 million Instagram followers. He told his audience that making only $400,000 a year is embarrassing and that his plane eats $2.7 million a year. Cardone refused to comment on this to the WSJ.
Another man named Brad Sumrok drives a Ferrari with the license plate “APT KING.” He charges $35,000 a year for membership in a sort of real estate investment club.
Folks, there is no shortcut to success. There is no get rich quick scheme. Please be careful of your hard earned dollars. You and your family’s future depends on you making safe and secure investments.
Works Cited:
https://www.wsj.com/articles/a-housing-bust-comes-for-thousands-of-small-time-investors-3934beb3?mod=hp_lead_pos7
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