Closing Your First Multifamily Syndication: 25 Units, 5 Months

A first multifamily syndication takes about five months from signed contract to funded closing, and the part that nearly breaks it usually isn’t the lender or the inspection report — it’s equity. Hugo Macau of Forest CRE closed a 25-unit portfolio in Providence, Rhode Island after an investor pulled $450,000 roughly a week before the closing date. His team replaced it in under four days.

What follows is the actual sequence of that deal: why he turned down 100-plus-unit opportunities to start smaller, how the five-month timeline breaks into phases, what made a four-day equity refill possible, and the buy box and team structure he’s carrying into a 160-unit Georgia deal and a 250-unit Texas deal.

From the Real Estate Pros Show

This article draws on an interview with Hugo Macau of Forest CRE (forestcre.com) on the Real Estate Pros Show, hosted by Issa Hanna.

Why Start at 25 Units Instead of 100

Macau had 100-plus-unit opportunities in front of him early and passed on them. He bought a 25-unit portfolio in Providence instead, with one reason: “Let me understand the wheels of it from a smaller perspective, and then get those lessons learned and be more comfortable when we scale up.”

That decision is worth taking seriously because of what preceded it. His first property was a completely vacant three-family bought with his own savings. He renovated it himself, listed it, showed it, screened the tenants, ran the background checks and handled the repairs. It rented in two weeks. He credits that hands-on stretch with understanding what sits behind every line item a property manager later reports to him.

The tradeoff on a smaller first commercial deal is real but favorable. A 25-unit raise is a smaller check stack, fewer LPs to manage, and a lender conversation you can actually learn from. The lessons still cost something — Macau says he came out of the five months with “pages of lessons learned” — but they cost less than they would on a 160-unit deal with triple the equity at risk.

If you own a few small rentals and are deciding between a 25-unit and a 100-unit as your first syndication, the question isn’t which one pencils better. It’s which one you can survive getting wrong. The second deal is where scale pays, because the structure already exists. As Macau puts it, once the structure is there, “it doesn’t matter if it’s 100 units, 1,000 units — you just have to scale up in terms of numbers.”

The Five-Month Contract-to-Close Timeline

Five months from contract to close. That’s what the Providence deal took, and it’s the same number Macau is projecting on both the 160-unit Georgia deal and the 250-unit Texas deal.

The phases he named, in order:

• Underwriting — complete before the LOI goes out, not after. This is the step most first-time sponsors do backwards.
• Due diligence — document review, financials, the full dig into what the seller actually has.
• Lender search — running parallel, and a major variable in the total timeline.
• Inspections and appraisals — dependent on third-party schedules and on-site access.
• Closing coordination — which in his experience meant significant back-and-forth with the seller’s broker.

His working estimate: due diligence through appraisal is “normally always three months, four months, and depending on the lender, depending on the people on site.” Five to six months total is what he calls a fair timeline.

Two things stretch that number and neither is fully in your control. The lender sets its own pace on underwriting and third-party reports. The people on site — inspectors, appraisers, the property manager coordinating unit access, the seller’s broker returning calls — set the rest. A sponsor who promises LPs a 90-day close on a first commercial deal is making a promise that other people have to keep.

Plan the equity raise against the longer end of that window, not the shorter one. Five months is a long time for a passive investor’s situation to change, which is exactly what happened on this deal.

The way that you feel you can be resilient is the team supporting around you. I had good attorneys, I had a good team on site, I got a good CPA — and they all supported, and we quickly pivoted, and we got that remaining equity filled out in about four days, not even a week.

— Hugo Macau, Forest CRE

When an LP Pulls $450,000 a Week Before Closing

About a week before closing, an investor committed to $450,000 backed out. Macau’s reaction is worth noting as much as his response: “That’s fine. It happens.”

The team refilled the remaining equity in under four days. That speed came from infrastructure that was already in place before the problem appeared:

• Attorneys already engaged on the deal and able to paper new subscriptions immediately.
• A CPA who knew the structure cold.
• An on-site team, including a property manager who was a close friend already managing his personal portfolio.
• Two GP partners actively involved — one from the start, one who stepped in near the end specifically to help close the gap.

The practical lesson for anyone raising equity for a syndication: a four-day refill is not a fundraising achievement, it’s a relationship achievement. Nobody wires several hundred thousand dollars on four days’ notice to a sponsor they met that week. The money moved because the people on the other end already had reason to trust the deal and the operator.

Macau is explicit that partners bring more than capital. “Sometimes it’s partners to invest, not only with money. Sometimes they bring something else to the table from a GP — value from a lender perspective, from a loan sponsor.” Loan sponsorship, lender relationships and credibility with LPs are all things a co-GP contributes that don’t show up on the cap table as equity.

The postscript matters. Both partners came out of the close asking him what was next: “Hugo, let me know what you have in your pipeline. Let’s dig in.” As he puts it — it’s not the deal itself, it’s the people.

The Buy Box and the Phased Business Plan

Macau buys value-add Class B and C properties in good areas. The plan is consistent: go in, add upgrades to the units and the property, force the value. That’s the whole thesis, and its simplicity is the point — a tight buy box is what lets you underwrite fast and say no quickly.

On acquisitions he rates himself an eight or nine out of ten, and the reason is sequencing: “Even before I start talking about an LOI, I have all underwriting done. I have everything done on my side and everything that could cause an issue or a risk.” Underwriting after the LOI means you’re negotiating while still discovering what you bought.

Before closing he builds a phased rehab and execution plan broken into four windows: 0–3 months, 6 months, 9 months, and two years. He attributes the discipline to 25 years in IT project management — mapping step by step what gets delegated and what gets implemented when.

The first two weeks post-close are operational, not construction. On the Providence portfolio that meant onboarding every tenant to a new platform and a new property management company, and communicating the strategy and intentions for the portfolio directly to the families living there.

That tenant-first stance runs through his underwriting assumptions, not just his marketing. He runs tenant surveys and treats resident retention as the foundation of the cash flow: “I focus a lot on the tenants. I like to make sure tenants feel at home, because without them you don’t have any business.” On a Class C value-add, where your return depends on executing rent increases without gutting occupancy, that’s an operating decision with a number attached.

The Four Hires That Make the Next Deal Possible

Macau names two people as non-negotiable: “My two best friends are my CPA and my property manager. Without those, I think you don’t go too far.” Add deal attorneys and a reliable on-site team and you have the four-part structure that carried the Providence close.

He found the property manager through a referral from a real estate friend — the same friend who guided him through his first three-family purchase. That’s the practical path for anyone building a first team. Ask the people already in your network who they’d call, rather than cold-sourcing vendors from search results.

He rates the current team a nine out of ten, and the reasoning is a usable standard for evaluating your own:

• They align with the vision and the strategy.
• He doesn’t have to babysit or follow up.
• They’re proactive rather than reactive.
• Expectations were made clear with everyone up front.

It’s a nine and not a ten because, in his words, he doesn’t believe in utopias or perfect individuals.

What he says has to be added to reach roughly 500 units and $100M AUM is a different layer entirely: asset managers and portfolio managers. The reason is geographic. Properties will sit in multiple states, and one operator cannot manage execution across them personally. His CPA is already prepared to scale, and the property manager wants to grow with the portfolio — but the middle management layer between the sponsor and the on-site teams doesn’t exist yet.

He rates his A-to-Z operation a seven overall, with a caveat worth repeating: locally, where everything is already set up, it’s a nine. The gap between those two numbers is expansion risk, and he knows exactly where it lives.

Going Out of State: Buying Local Knowledge You Don’t Have

Macau’s stated bottleneck for moving into the southern states is not finding deals. It’s finding trusted local people.

His reasoning is concrete. Underwriting a Texas property from Massachusetts means you are reading a spreadsheet and a listing package. Someone on the ground sees environmental issues, actual job growth, population movement and which blocks in a submarket are improving versus which are not. “One thing is me looking at it from Massachusetts,” he says. “Another one is you that is on site and knows all the environmental issues, all the job growth, population growth, what’s impacting, what’s not impacting.”

His method for closing that gap is unglamorous and it’s the correct one: show up before you commit capital. He attends commercial real estate conferences in target markets — Dallas, specifically — and arranges in-person portfolio tours with people he meets there. The relationships get built while he has nothing at stake, so that when a deal appears he already knows whose read on the submarket he trusts.

This is also why his self-assessment on operations drops from a nine locally to a seven when expansion is factored in. He can bring parts of his existing team and his infrastructure into a new state. What he can’t bring is the certainty that a new on-site operator will perform. “I know that you’re going to do a good job, but I don’t know if this guy is going to do a good job, because I still don’t know.”

If you’re scaling from small multifamily into out-of-state commercial, sequence it the same way. Build the local bench first. The deals will still be there.

Frequently asked questions

How long does it take to close a first multifamily syndication?

Plan on five to six months from signed contract to funded closing. Hugo Macau’s 25-unit Providence portfolio took five months, and he’s projecting the same window on a 160-unit Georgia deal and a 250-unit Texas deal.

Inside that window, due diligence through appraisal typically runs three to four months. The remaining time depends heavily on your lender’s pace and on third parties with site access — inspectors, appraisers, the property manager and the seller’s broker.

What should you do if an equity investor backs out right before closing?

Go immediately to the relationships already attached to the deal — co-GPs, existing LPs, and anyone your attorney and CPA can paper quickly. Macau lost a $450,000 commitment about a week before closing and refilled the gap in under four days, because his attorneys, CPA and two GP partners were already engaged and fully briefed on the transaction.

A late refill is almost never solved by new outreach. It’s solved by people who already trust the sponsor and understand the deal, which means the work of building that bench has to happen months earlier.

Is it better to start with a 25-unit deal or go straight to 100+ units?

Starting smaller lets you learn the mechanics at lower stakes. Macau had 100-plus-unit opportunities available before his first commercial close and deliberately took the 25-unit instead, to understand how the process works before scaling the raise.

The argument for it is that the lessons are identical in kind and smaller in cost. He came out of a five-month close with pages of lessons learned — the same mistakes on a 160-unit deal would have involved several times the equity.

Who are the first team members you need before syndicating a deal?

A CPA, a property manager, deal attorneys and a capable on-site team. Macau calls the CPA and property manager “my two best friends” and sourced his PM through a referral from a real estate friend rather than cold outreach.

As the portfolio grows across state lines, he says the next required additions are asset managers and portfolio managers — the layer that sits between the sponsor and multiple on-site teams once properties sit in different states.

How do you underwrite an out-of-state multifamily deal without local knowledge?

You don’t underwrite it alone — you build a local relationship first and use their read on the submarket. Macau’s point is that environmental issues, real job growth, population movement and block-level submarket detail are visible to someone on the ground and largely invisible from a thousand miles away.

His approach is attending commercial real estate conferences in target markets and doing in-person portfolio tours with contacts there, building those relationships before any capital is committed.

The bottom line

Before you send an LOI on a first commercial deal, name the four people who will be sitting on it with you — attorney, CPA, property manager, and at least one co-GP with lender credibility — and get them engaged while the deal is still a maybe. That bench is the difference between a late equity gap being a four-day problem and a dead deal.