Top 20 Questions To Ask Your Syndicator Before Investing

Here is a list of the top 20 questions you should get answered before investing with a sponsor. This list is not all-inclusive. Also some of these may be answered by the sponsor in a webinar, on their website or through other communications.

1. 1. How long have you been in real estate investment?
3. 2. Have you or any of your companies or properties filed for bankruptcy? If so, what happened and what changes have you made?
5. 3. Have there been any criminal charges or investigations against the company or any of its principals? Will the main principals survive a background check?
7. 4. Do you know approximately how many deals the sponsor have gone full cycle?
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9. 5. Approximately how much money has the company raised to date?
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11. 6. Describe the company’s competitive advantages?
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13. 7. Please describe the company’s overall strategy and and philosophy
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15. 8. What happens if the key-man becomes incapacitated?
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17. 9. What geographic markets does the company target?
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19. 10. Do you put any money into the deal other than your broker commission? 
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21. 11. Did you ever have a deal go bad? How did you handle it?
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23. 12. Have you ever lost investors principal?
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25. 13. Have you ever issued a capital call?
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27. 14. How do investors receive accurate information about the status of their investments?
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29. 15. Is the firm’s accounting being handled in-house or outsourced? 
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31. 16. How often are investors provided information regarding the status.
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33. 17. Can the team provide references?
    
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35. 18. How would the investor’s capital be protected if something were to happen to the sponsor?
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37. 19. Do you retain business liability or Errors & Omissions Insurance?
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39. 20. What are your targeted and historical returns?

These are important to understand who you are investing with. I would equate this process to the first time you ever found someone to watch your children or pet. You want to make sure you understand who it is you are dealing with and they are trustworthy. Also you want to understand their experience, as every pilot can fly a plane but not every pilot can fly through the worst storm, and you want to be with the pilot who can fly through anything.

We hope you found this information useful.