How much of your own money is in this deal?
If the sponsor doesn't lose when you lose, incentives drift. Ask for the number, not a promise.
How we answer: our co-investment in each deal is disclosed in its offering documents. Ask us on any deal.
Show me a deal that didn't go to plan.
Everyone has a highlight reel. How a sponsor handles the misses tells you more than the wins ever will.
How we answer: we'll walk you through our weakest exit and the deals we passed on. Not just the home runs.
How do you get paid, and when?
Fees paid up front reward doing deals, not doing good deals. You want most of the sponsor's upside to come after you've been paid.
How we answer: investors get a preferred return first, then profits are split. Every fee is spelled out in the offering documents.
What has to be true for this to work?
Every deal has two or three assumptions doing the heavy lifting. Rent growth, renovation cost, exit price. Find them and push on them.
How we answer: we show you the assumptions and what happens if they come in worse. If a deal only works in a perfect world, we don't bring it to you.
What's the debt, and when does it come due?
Most real estate blowups start with the loan. A rate that resets, a maturity that hits at the wrong time, a refinance that doesn't pencil.
How we answer: loan terms, rate and maturity are in every deal package. We keep leverage sensible so a bad year is a bad year, not a crisis.
Who actually runs the property?
The business plan is only as good as the people executing it. Find out who answers the phone when the AC breaks in July.
How we answer: our team handles acquisitions, asset management, maintenance, accounting and reporting. Construction partners and property management are people we've worked with for years.
What will I hear from you, and how often?
Silence is the number one complaint passive investors have. Ask to see a real report before you invest.
How we answer: quarterly reports in the investor portal, a K-1 each year, and bad news before good. We'll send you a sample report.
How long is my money tied up, and how does it come back?
Real estate is illiquid. Know the hold, the exit plan and what happens if the market isn't there when the plan says sell.
How we answer: most of our deals hold 5 to 7 years, with the exit plan laid out before you invest. We'd rather hold longer than sell into a bad market.
Who checks your work besides you?
A sponsor grading their own homework isn't diligence. You want outside eyes on the deal.
How we answer: securities attorneys prepare every offering. Lenders, appraisers and inspectors check the deal before we close. When demand is the question, we pay for a third-party study, like we did on the memory care deal we walked away from.
Have you ever walked away from a deal?
Discipline shows up in the deals a sponsor doesn't do. If the answer is "never," be careful.
How we answer: yes. Most deals never make it past our underwriting. Here's one we walked away from →