You can't expect your syndication investments to work out exactly as the people promoting the deal tell you they will. You shouldn't expect it and may well be setting yourself up for disappointment if you do.
In our experience, it makes sense to assume that the cash flow from your deals will be slower, or at least lumpier, than you've been led to expect, especially if you are participating both in the cash flow and appreciation of a syndication investment.
Deals--and overall portfolios--may take time to generate positive returns. If you are patient you are likely to be rewarded. If you are not patient you might be better served looking to other types of investments. You can't control private syndications, you typically can't liquidate them early, and you may have to accept lower and later cash flow than you'd like.
Syndication deals take different forms. Sometimes the deal is for a single asset purchase. Let's imagine it's a complex of 100 apartments outside of Kansas City, Missouri. The syndicator promoting the deal might tell you up front you can expect to receive cashflow after the first quarter, at which point they expect the asset to be "stabilized." Let's imagine in their pro forma--like one we just saw today--will generate 5% cash on cash in the first year. So on your $100,000 investment, you might be expecting $5,000 in the first year as cash flow, or $1,250 after the first quarter.
Our suggestion is not to count on that, even if the pro forma says it. We prefer to be pleasantly surprised when it does happen rather than be disappointed when it does not. Our experience is that about half our deals hit just what we were led to expect and about half do not. That's OK--the key is not to have the cashflow portion of the deal generate all the returns in most deals.
There are some investments where you are only counting on the cashflow--and in that case, it's reasonable to expect the cashflow to hit when you expect it and to continue. Many single asset deals have multiple classes. A typical deal might have a Class A investment type in which you can expect 8% - 10% cash on cash preferred return (on the lower side these days for new deals)--but no participation in the upside. As a Class A investor, you can and should count on the cash flow when you expect it, or for the operator to catch you up quickly if not. You are in essence functioning like a lender and will get paid back first. But you get nothing once the asset is sold; in fact, you may prefer that the asset NOT be sold, as you then have to start again to seek a new deal. Certain funds--different than single asset deals--also work this way.
We tend to prefer single asset deals (rather than complicated funds) and always choose the option that includes equity participation, often (but not always) called Class B or Class C investors. In this arrangement, you may receive a cash on cash return each month, quarter, or year, but you are really playing for the asset to appreciate in value to get much if not all of your profit. It is the combination of the cash on cash return plus the appreciation that will get you to the doubling, say, of your investment over the five or so years of a hold time. Sometimes it may be three years, sometimes seven. But no matter what, you may have a bumpy ride from a cash flow perspective and then a lump sum payment at the end.
All this is to say: many syndicators are good to their word, they stabilize the asset quickly, and they pay all investors a return on capital and a return of capital in the fashion you've been led to expect. Every so often they even return more than they say they will. But others do not for one reason or another. The business plan doesn't come together, they don't have the tenants they thought they did, the property manager isn't so good or they quit, and it takes longer for the plan to come together. That may or may not be a bad sign. An asset can pay off later even if the cashflow isn't there right from the start as you expect.
The main point of this post: if you really need certain cashflow on the timeline you expect it, certain syndication investments may not be for you. You can look for "Class A" investments of the sort we described in single assets from syndicators with long, excellent track records that may pay on time. You can invest in mature funds that have many assets and pay very regularly. But otherwise, you will need patience. That patience in turn may lead to great returns--though likely not on exactly the timeline the syndicator led you to expect. It's a bumpier, less predictable road than most pro formas, online webinars, and confident syndicator sales pitches would have you believe.