How to vet a private placement opportunity & general partner?
Hello. I'm relatively new to BP. While I am currently invested in a few multi family properties, I'm considering my first private placement deal where I'm one of several investors. It's a large deal for roughly 250 units that appears to offer attractive returns as well as a five year exit strategy. I'm considering it to diversity my holdings and to be involved in something that would be well beyond my reach otherwise. On paper everything seems to make sense about the deal. The questions for me are more about trusting the people involved, trusting the projections and getting a grasp on whether everything is as it's being presented. How does an investor on this type of deal verify whether others have actually made their capital contributions? How do you verify if the financials are accurate? I've read up on the General Partner's respective bios (two people) and have spoken with one of them who has an active R/E podcast and has been on BP previously. He certainly understands the business but the track record isn't terribly lengthy simply because the company is relatively young as are the principals. Among other items, I've requested and received a copy of the PPM (Private Placement Memorandum), partnership agreement, the unexecuted loan approval with the lender and have had Q&A's with one of the GP's via email. While the GP is investing in the deal as well, it's just above the minimum amount of $50k. If anyone can offer insight on the best ways to evaluate this type of deal AND how to determine if the general partner is solid, please advise. Do I need to consult an attorney to review the PPM and partnership agreement? I look forward to feedback from those who have participated in this type of deal or have some knowledge. Thank you.