At the core of a real estate syndication is the sponsor or syndicator. This is typically a professional or a group with expertise in real estate investments, property management, and deal sourcing. The sponsor identifies investment opportunities, conducts due diligence, and manages the entire project. They play a pivotal role in structuring the deal, raising capital from investors, and overseeing the property's operations.

The sponsor prepares an investment offering, also known as a private placement memorandum (PPM). This document outlines all the details of the investment opportunity, including property information, financial projections, risk factors, and the terms of the deal. It provides potential investors with a comprehensive understanding of the opportunity before they commit funds.

Investors who participate in the syndication are known as limited partners (LPs). LPs contribute capital to the investment and, in return, receive ownership shares or units in the syndication entity. LPs typically have limited liability, meaning their financial risk is generally limited to the amount they invest. They also have limited involvement in the day-to-day management of the property.

The sponsor or syndicator acts as the general partner (GP) in the syndication structure. The GP is responsible for managing the investment, making decisions, and executing the business plan. They often have a greater level of responsibility and authority compared to limited partners. In return for their active role and expertise, GPs may receive a larger share of the investment profits, commonly referred to as a "promote" or "carried interest."

A legal entity, often a limited liability company (LLC), is created to hold and manage the property. The GP typically manages this entity and makes operational decisions on behalf of all investors. The operating agreement outlines the rights, responsibilities, and distribution structure of both GPs and LPs.

Once the investment offering is finalized, the sponsor starts raising capital from potential investors. Investors review the PPM, conduct their due diligence, and decide whether to commit funds to the syndication. The capital raised from investors forms the investment pool used to acquire, manage, and potentially improve the property.

After acquiring the property, the GP takes charge of asset management, overseeing property operations, tenant relations, maintenance, and other day-to-day activities. The goal is to maximize the property's performance and generate rental income or capital appreciation.

As the property generates income, investors receive distributions according to the terms outlined in the PPM. Distributions are typically made on a regular basis, such as quarterly or annually, and are based on the investors' ownership percentages.

At some point, the syndication will reach its exit strategy, which could involve selling the property, refinancing, or another predetermined exit plan. The proceeds from the exit are distributed to investors based on their ownership percentages, and the syndication is typically dissolved.