First of all, you should take the security laws seriously. To stay on the right side of the law, there are some boxes you need to check off when you put together your real estate syndication.

You can call it a joint venture. You can call it a profit sharing agreement. You can even just pretend that you’re doing deals with your brother-in-law. No matter what you call it, at the end of the day, a security is defined as anytime you’re taking money from an investor and generating a return based on your effort.

Don’t pretend you’re not involved in a security. If your investors are passive, and you’re the active investor, you need to be set up as a syndication. I talked with Mauricio Rauld, one of the country’s premier real estate syndication lawyers about some best practices for real estate syndication. Nearly 99% of his business is in this field, so he’s got a wealth of experience to share.

Using social media to build trust, educating investors and building real relationships will all help you form solid real estate investing partnerships. There are a few common mistakes that investors make, so Mauricio mentions them just to give you a heads up.


Social media is a great place to share your deals, but you’ll need to be careful about what you post. Mauricio says that most people understand that you can’t post your newest deal on social media. Of course, that seems like a given idea. However, some investors like to do what’s called “conditioning the market”. This is when the investor talks a lot about his current deal in an effort to drum up support for his next deal. All of this social media posting is about the investor and his money and his deal making skills.

On the flip side, social media is a great place to let potential investors get to know you, but the best way to do that is by adding value to the conversation. Do share about why investing in Ohio is poised to take off. Do share about the real estate market trends that you’ve noticed. Don’t wait months and months to post before overwhelming your followers with all kinds of new ideas.

It’s really difficult for investors to invest with you after seeing you once on social media. Your goal is to build that long-term relationship with them. The best strategy that Mauricio has seen is to use social media posts to drive them to an educational webinar, or to collect their email addresses.

A tweet just isn’t long enough to include all of the disclaimer information you need to be compliant with security laws. On the other hand, an email is a great way to disclose when you’re raising money for a 506C. Just like social media posting, don’t let your email go all quiet for most of the year. A great tip from Mauricio is to send out emails about the deals you’re passing on. Educate your investors about why a certain deal didn’t work out. This is a great way to teach them, and also to let them see that you have their best interests at heart.

This is the same model that I teach: build the relationship with an investor first. Talk about the deals you’ve done. After that, when you have your next deal, you have an investor in place who’s already hungry to partner with you. You’ll end up almost with a feeding frenzy of people who want in on a deal with you because they’ve seen solid evidence of the work you’ve done.


I love going out and talking with people face-to-face, but it’s understandable if you can’t be in front of an audience all of the time. Webinars, emails, Zoom meetings, and similar platforms can all help you build strong investor relationships. And if you’re not up on the stage, you can go to meetups to find partners, meet investors, and get to know other movers and shakers in the industry.

If you’re new, it will take you time and effort to build out your network. Find someone more experienced than yourself and partner with them. As I build my network, I like to take the approach of “Well, these are some deals that I’ve done, but I’m not assuming you’re looking to invest right now.” It’s a low pressure approach that lets your investor feel comfortable.

Mauricio suggests that you take your business plan to an individual you might like to partner with, and ask them to offer suggestions. A best practice would be approaching them from the vantage point of “What can I offer the investor?”. Because as Mauricio says, investing with you is really about them, and not about you.

You need to be out at meetups and you need the investor relationship in place long before you need the money for that 200 unit building you really want to add to your portfolio. You can’t rush around two weeks before the deal is set to close trying to find the last $350,000. Trust me. I’ve had guys approach me with deals like that, and there’s not enough time left to make it a true joint venture.


Mauricio wants to hammer home this point: You cannot pay someone a commission to raise money in real estate syndication. You cannot partner with someone and pretend they’re an equal partner, when they’re not. Eventually, being dishonest about the kind of joint ventures you’re doing will come back to bite you.

How you put together this partnership is very, very important. I would totally encourage you to put together a team full of complementary strengths. Maybe one guy is great at underwriting. Maybe somebody else is in charge of the asset management or investor relations. Every member of your team should be pulling together equally.

Above all, consult with a real estate attorney to build an airtight real estate syndication. If you ever find yourself in front of a judge over complaints from your investors, you want to leave no doubt that you did your due diligence for your investors. The business plan, the private summary, the subscription agreement in writing with those disclosures are all designed to protect you and your investors from fraud.

Don’t leave anything to chance. Contact a securities lawyer beforehand, and save yourself a lot of headache.

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