PROPERTY INFORMATION
PROPERTY/DEAL NAME
PROPERTY CITY
PROPERTY STATE
PROPERTY ZIP CODE
SPONSOR TEAM
TRUST
TEAM
TRACK RECORD
EQUITY CONTRIBUTION
This shows that they believe in the project and have skin in the game
NUMBER OF DEALS
If the sponsors are growing quickly and have multiple deals at the same time, this project may not get the attention it deserves
MARKET
MARKET TYPE
POPULATION GROWTH
Find this info here www.city-data.com
MEDIAN HOME VALUE
CRIME RATE
SUBMARKET
POVERTY LEVEL
<20% is desirable, less churn rate due to evictions
HOUSEHOLD INCOME
UNEMPLOYMENT RATE
DEMOGRAPHIC DIVERSITY
Ideal: home to people of diverse race and ethnicity
RETAIL STORES
Gives an indication of the class of property (Starbucks class A, Walmart Class B, Dollar store class C)
EMPLOYERS
Look for diversified employers so that the economy is not dependent on one employer or one sector. No sectorshould contribute more than 20% of the total employment.
PROPERTY
NUMBER OF UNITS
>60 units can employ full time manager and maintenance people making it more efficient
PRICE PER DOOR
Get the comps from the sponsor and make sure it is not too far off when compared to other properties in the area
CLASS OF PROPERTY
LOCATION CLASS
CURRENT OCCUPANCY
90% or higher is desired, less than 90% does not qualify for an agency loan, bridge loan can come with risks
ECONOMIC VACANCY
The difference between the actual rental income and the gross potential rent of a property
PROJECTED RETURNS
CASH-ON-CASH RETURNS
Watch video on projected returns in syndications here.
INTERNAL RATE OF RETURN
EQUITY MULTIPLE
DISTRIBUTION FREQUENCY
Quarterly Vs. Monthly
INITIAL DISTRIBUTION
6 months for stabilized properties, 9-12 months for deep value-add
FINANCING
TYPE OF LOAN
Agency loan is desired but may need bridge loans for deep value add projects
LOAN TO VALUE
Higher leverage may mean more returns and more risk
LOAN TERM
Bridge loans are shorter (1-3 years)
IO TERM
Sponsor pays only interest on the mortgage during this period
DEAL ASSUMPTIONS
PURCHASE CAP RATE
EXIT CAP RATE
ATLEAST 50-100 bps higher than purchase cap rate
PROJECTED RENT INCREASE
REHAB BUDGET PER DOOR
Depends on business plan, average $10,000 per door in 2023
YEAR 1 REVENUE INCREASE
PROFIT SHARING AND FEES
PREFERRED RETURN
Watch video on preferred return here.
LP/GP SPLIT
Watch video on LP/GP split here.
ASSET MANAGEMENT FEE
Watch video on fees in syndications here.
ACQUISITION FEE
DISPOSITION FEE
OTHER FEES
BUSINESS PLAN
HOLD PERIOD
How does the sponsor plan to force appreciation of the asset i.e., add value. Watch video on value-add deal here.
STRESS TEST
Offering memorandum should include return projections based on worst case scenarios
EXIT STRATEGY
DEPRECIATION
RESERVES
INVESTOR
YOUR GUT FEELING
INVESTMENT AMOUNT
SOURCE OF FUNDS
HARD COMMIT DEADLINE
FUNDING DEADLINE
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Disclaimer: The checklist is provided for informational purposes only and does not constitute financial or investment advice. Always consult with a qualified professional before making any investment decisions.
