Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
6y
Here are the top 3 that come to mind for me
Experience - Experience is the best teacher
Integrity - what do you do when times get tough
Ability to listen - in order to make the best decisions one needs to be able to gather information from others. If I get the feeling someone isn't really capable of listening to me or others, it brings into question their ability to manage through tough business situations.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
6y
Here are the top 3 that come to mind for me
Experience - Experience is the best teacher
Integrity - what do you do when times get tough
Ability to listen - in order to make the best decisions one needs to be able to gather information from others. If I get the feeling someone isn't really capable of listening to me or others, it brings into question their ability to manage through tough business situations.
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
6y
@Jorge Abreu communication. Are they responsive to emails and calls? To tack onto Taylor's integrity comment, do they let you know things are not going well and outline the plan to resolve the issue? Or do they wait until it is "too late" and need to halt distributions, then let you know things have been trending poorly for the last couple months?
Understanding that in today's environment, sometimes there are no warnings before distributions need to be reduced/delayed/halted.
Rental Property Investor · Redondo Beach, CA · Member since 2017 · 411 posts · 477 votes
6y
Hello @Jorge Abreu. (Sweet house you are working on btw). @Taylor L. stole my thunder a little bit. Maybe I will switch his 1 & 2. Have to get a true sense of genuine honesty and integrity. A track record is definitely key, but if it is a smart team with managerial experience I will listen, but I do want to know someone who has exited several deals is closely affiliated with them and is always looking over their shoulder. Is their strategy aligned with my own? If I want to do B class, light, value add with some consistent cash flow, and they want to do distressed, heavy-lift repositions with proceeds coming all on the backend, it probably isn't a good fit. Are they in the markets that I want to be in? The metrics have to align with my risk tolerance. Communication and transparency are huge - Are they updating me every month? How are renovations coming? If there haven't been distributions, why? Are we on target to meet our projected returns? If not, be transparent, and talk about the plan for turning things around.
Attorney · Saint Augustine, FL · Member since 2016 · 242 posts · 234 votes
6y
Here is some information you may want to explore before making an investment decision:
1. What is the Sponsor’s background, education, and experience with similar investments, if any.
2. Who are the team members involved in acquisition and operation of the property, including attorneys, CPAs, other members of the Sponsor, property managers, and affiliates that may receive fees, etc.
3. How are cash distributions handled to investors during acquisition, operation, and disposition of the property including the proposed timing and anticipated percentage returns.
4. What are the proposed Sponsor fees and cash distributions?
5. What is the proposed duration of the investment?
6. What is the type and condition of the property, the purchase price, financial history, proposed ‘value add’ and exit strategies, and pro forma financial projections?
7. What are the withdrawal options for investors, if any?
8. What are their dispute resolution policies?
9. What are the voting rights of investors?
10. Do they have provisions for removal of the Sponsor if they are not performing?