If you’re thinking about investing in a passive real estate deal, whether it’s a syndication or a real estate fund, it’s important to learn how to vet the opportunity properly.
I’ve found that learning how to choose deals effectively helps you invest in deals that will help you get closer to your goals. It will also help you avoid deals that might take you farther from those goals.
You’re investing as a “limited partner,” which means you have equity (a piece) in the deal, but it’s really the sponsors or operators who are doing the heavy lifting.
They should care who is expertly managing them during this critical period in their lives and feel comfortable with me as their physician.
The truly great ones will do a better job managing the downside when the economy is poor or when things go unexpectedly.
The third thing you should understand is the incentives of the sponsor, and how well they align with your interest as an investor.