Why is Successful Passive Investing in Real Estate So Difficult?

Syndications & Passive Real Estate Investing

Why is Successful Passive Investing in Real Estate So Difficult?

Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes

Why is successful passive investing in Real Estate so difficult?
Well, two reasons

1. The passive investor is attempting to obtain a higher risk reward ROI than the general market allows. This can only be obtained by a superior ability to choose which passive investments to invest in. Almost all investors can do a rudimentary due diligence analysis or have an advisor who can. The few that are able to uncover the real "hidden gems" either have SUPERIOR analytical ability (very difficult) or do a much more thorough and time consuming analysis - which in itself raises the question of whether or not the investment is indeed "passive" .

2. By the nature of the investment structure (what used to be called a limited partnership, but now likely to be a non managing member LLC) the MONEY has no ability to "right the ship" should something go wrong, and has total reliance on the syndication or fund manager, who may or may not have aligned interests, positive incentives, and or the managerial expertise, experience and motivation to protect, secure and enhance the subject investment.

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Bianca BarcelosBusiness Member

NH · Member since 2026 · 88 posts · 48 votes

2mo

I'm with you! I think that true "passive" investing in real estate is difficult because it misses the point of the asset itself. Real estate simply isn't a "passive" investment to just plop some money into; it's an active operational business with physical space with appliances, furniture, walls, floors, and people management to think about.

Even if you completely outsource to a property management company, you still can’t completely run this type of investment (to its most successful potential) if you're checked out. RE investing requires a level of asset management and check in's with your active partner (PM or otherwise). Understanding the financial analysis, operating expenses, rent rolls, etc. is important as well as knowing the physical condition of the property, neighborhood, strategy, and tenant.

All of these things, coupled with the current environment where cash flow is harder to come by, the margin for error is shrinking and we can't afford underperformance in our investments. Real Estate is a great investment but a tough one to do passively. It's important not to completely gamble cash on someone else's management of your asset.

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John M.
Investor · Fairfax, VA · Member since 2015 · 1k+ posts · 801 votes
2mo
The best type of passive investment in my portfolio where the owner actually has control are NNN properties (NOT syndications). Specifically 1,500 square size retail/office ground floor condo in a high foot traffic area.
It's passive because the condo association takes care of the the roof, sidewalk and other common areas.
The 1500 square foot size provides more types of merchants that need that space. If you go too big like 3,000 square plus then you are looking for a unique user and it will take longer to lease.
A condo is just a box without a lot of need for fancy buildouts or structural oddities.
As far as syndications go these are more difficult to analyze in my opinion. Yes they are 100% passive as you are a limited partner, but the hard work is doing the due dilligence upfront.
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Don KonipolBusiness Member
OP
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
2mo
@Jay Hinrichs, @Henry Clark, @Stuart Udis, @Chris Seveney, and for anyone else insulted by this clown Todd Goedeke, or anyone else believing anything he writes; Mr Goedeke lists his former occupation (until 2010) as a financial advisor. Running his name thru the data base, we find:

TODD LLOYD GOEDEKE CRD#: 1210932PRPreviously Registered Broker BARRED. FINRA has barred this individual from acting as a broker or otherwise associating with a broker-dealer firm.

Further research we find:

Theft-false representation (two counts) Todd L. Goedeke, 58, 1202 Millersville Ave., Howards Grove, nine months jail, four years probation, $299.

Why am I not surprised
Financial Industry for Allegedly Misappropriating Customer Funds September 2, 2013| by Staff Attorney
The Financial Industry Regulatory Authority (FINRA) has barred Todd Lloyd Goedeke and Ronald W. Nichter from the financial industry after the brokers were accused of misappropriating funds from customers.
In March 26, 2004, Goedeke became a registered representative with Cantella & Co., Inc. (Cantella), a FINRA regulated broker-dealer. Goedeke remained associated with Cantella until his termination on June 18, 2010. On or about July 1, 2010, Cantella filed a Form U5 that stated that Goedeke had been terminated. On or about February 22, 2011 and March 16, 2011, Cantella filed amendments to their Form U5 disclosing allegations that Goedeke may have converted customer funds. Goedeke’s public disclosures also list that he is employed by Wealthcare & Retirement Solutions, a financial planning company that provides insurance, fixed annuities, and life insurance.
Ronald W. Nichter became registered in the securities industry in December 2008 with Cantella Nichter’s registration was terminated by Cantella on April 4, 2013.
Both brokers have been accused by FINRA of misappropriating customer funds.
Goedeke did not cooperate with FINRA’s investigation concerning customer’s claims of theft. On May 4, 2011, FINRA sent a letter to Goedeke concerning the investigation and requested, pursuant to FINRA Rule 8210, that Goedeke submit a detailed written response to each matter and customer and to also provide documents in his possession or control relating to these customers. Goedeke did not respond to the FINRA requests. Subsequently, FINRA barred Goedeke from the securities industry.
Goedeke has been the subject of several other regulatory investigations prior to his termination from the industry. A complaint filed by the state of Wisconsin in 2011 accused Goedeke of using money invested by his clients for his own personal expenses as well as offering to sell unregistered securities within the state. Goedeke has also had seven customer complaints filed against him. Several of the customer complaints allege that Goedeke made the client write out checks to his dba Wealthcare company that were intended to be deposited in other brokerage accounts but never were.
In Nichter’s case, FINRA alleged that between approximately 2009 and 2013, Nichter misappropriated approximately $140,000 from approximately ten customers. Nichter is alleged to have forged the clients’ signatures on Letters of Authorization that instructed Cantella’s clearing firm to issue checks made payable to the customers. Then, Nichter intercepted the checks, endorsed them himself, deposited them into his personal account, and used the funds for personal expenses.
The attorneys at Gana Weinstein LLP are experienced in investigating claims of financial fraud. Our attorneys can help you detect and uncover suspicious activity in your accounts. Our consultations are free of charge and the firm is only compensated if you recover.
Posted in: Failure to Supervise and Investor FraudTagged: Cantella, Misappropriation, Ronald Nichter and Todd GoedekeUpdated:August 28, 2018 5:05 pm
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- Jay HinrichsBusiness Member
  Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
  2mo
  Quote from @Don Konipol:
  
  @Jay Hinrichs, @Henry Clark, @Stuart Udis, @Chris Seveney, and for anyone else insulted by this clown Todd Goedeke, or anyone else believing anything he writes; Mr Goedeke lists his former occupation (until 2010) as a financial advisor. Running his name thru the data base, we find:
  
  TODD LLOYD GOEDEKE CRD#: 1210932PRPreviously Registered Broker BARRED. FINRA has barred this individual from acting as a broker or otherwise associating with a broker-dealer firm.
  
  Further research we find:
  
  Theft-false representation (two counts) Todd L. Goedeke, 58, 1202 Millersville Ave., Howards Grove, nine months jail, four years probation, $299.
  
  Why am I not surprised
  Financial Industry for Allegedly Misappropriating Customer Funds September 2, 2013| by Staff Attorney
  The Financial Industry Regulatory Authority (FINRA) has barred Todd Lloyd Goedeke and Ronald W. Nichter from the financial industry after the brokers were accused of misappropriating funds from customers.
  In March 26, 2004, Goedeke became a registered representative with Cantella & Co., Inc. (Cantella), a FINRA regulated broker-dealer. Goedeke remained associated with Cantella until his termination on June 18, 2010. On or about July 1, 2010, Cantella filed a Form U5 that stated that Goedeke had been terminated. On or about February 22, 2011 and March 16, 2011, Cantella filed amendments to their Form U5 disclosing allegations that Goedeke may have converted customer funds. Goedeke’s public disclosures also list that he is employed by Wealthcare & Retirement Solutions, a financial planning company that provides insurance, fixed annuities, and life insurance.
  Ronald W. Nichter became registered in the securities industry in December 2008 with Cantella Nichter’s registration was terminated by Cantella on April 4, 2013.
  Both brokers have been accused by FINRA of misappropriating customer funds.
  Goedeke did not cooperate with FINRA’s investigation concerning customer’s claims of theft. On May 4, 2011, FINRA sent a letter to Goedeke concerning the investigation and requested, pursuant to FINRA Rule 8210, that Goedeke submit a detailed written response to each matter and customer and to also provide documents in his possession or control relating to these customers. Goedeke did not respond to the FINRA requests. Subsequently, FINRA barred Goedeke from the securities industry.
  Goedeke has been the subject of several other regulatory investigations prior to his termination from the industry. A complaint filed by the state of Wisconsin in 2011 accused Goedeke of using money invested by his clients for his own personal expenses as well as offering to sell unregistered securities within the state. Goedeke has also had seven customer complaints filed against him. Several of the customer complaints allege that Goedeke made the client write out checks to his dba Wealthcare company that were intended to be deposited in other brokerage accounts but never were.
  In Nichter’s case, FINRA alleged that between approximately 2009 and 2013, Nichter misappropriated approximately $140,000 from approximately ten customers. Nichter is alleged to have forged the clients’ signatures on Letters of Authorization that instructed Cantella’s clearing firm to issue checks made payable to the customers. Then, Nichter intercepted the checks, endorsed them himself, deposited them into his personal account, and used the funds for personal expenses.
  The attorneys at Gana Weinstein LLP are experienced in investigating claims of financial fraud. Our attorneys can help you detect and uncover suspicious activity in your accounts. Our consultations are free of charge and the firm is only compensated if you recover.
  Posted in: Failure to Supervise and Investor FraudTagged: Cantella, Misappropriation, Ronald Nichter and Todd GoedekeUpdated:August 28, 2018 5:05 pm
  Comments are closed.
  
  nope he was / is rude and defensive.. its one thing to make a boo boo in offerings etc Like I did and got my hand slapped and its another to steal money.
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Todd Goedeke
Contractor · Sheboygan, WI · Member since 2016 · 921 posts · 266 votes
2mo
@Jay Hinrichs please confirm that you cannot defend your comments about NNN leases . Therefore you are slandering a person in an unrelated matter having nothing to do with RE investing .
Such hypocrisy, keep calling the kettle black.
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- Jay HinrichsBusiness Member
  Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
  2mo
  Quote from @Todd Goedeke:
  
  @Jay Hinrichs please confirm that you cannot defend your comments about NNN leases . Therefore you are slandering a person in an unrelated matter having nothing to do with RE investing .
  Such hypocrisy, keep calling the kettle black.
  
  Mr. Goedeke my record is very public and I will stand by it.. your record is now very public and well its up to others to deem you credible or not..
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Todd Goedeke
Contractor · Sheboygan, WI · Member since 2016 · 921 posts · 266 votes
2mo
@Don KonipolYour true character surfaces when you can t defend your comments and show a lack of knowledge about triple net leases relating to passive investing. None of your comments are credible as you deny how NNN leasing does not exist as a passive investment in RE. You even ignore the fact that triple net leases are a primary tool for passive investing when holding RE inside self directed solo 401k plans and IRAs.
Resorting to name calling and bringing up unrelated matters does not diminish the fact your comments on passive investing are lacking credibility as they relate to NNN leases, especially with short term vacation rentals.
Your claim of insults are self imposed.
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- Jay HinrichsBusiness Member
  Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
  2mo
  Quote from @Todd Goedeke:
  
  @Don KonipolYour true character surfaces when you can t defend your comments and show a lack of knowledge about triple net leases relating to passive investing. None of your comments are credible as you deny how NNN leasing does not exist as a passive investment in RE. You even ignore the fact that triple net leases are a primary tool for passive investing when holding RE inside self directed solo 401k plans and IRAs.
  Resorting to name calling and bringing up unrelated matters does not diminish the fact your comments on passive investing are lacking credibility as they relate to NNN leases, especially with short term vacation rentals.
  Your claim of insults are self imposed.
  
  LOL Don hands down is one of the most knowledgable members of BP NNN leasing is not rocket science its a very simple concept.. and execution with credit worthy tenants like national companies is the prime draw from what I see.. or in my case a medical practice.
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
2mo
You are offering advice on how to invest passively through 401(k) and IRA accounts without triggering prohibited transaction penalties....and are barred from serving as a financial advisor with no less than 5 disciplinary actions filed against you.....don't see how you could possibly say this is unrelated......

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Jamie Parker
Real Estate Investor · Memphis, TN · Member since 2016 · 417 posts · 140 votes
2mo
Well that took a turn I didn't expect.
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Joe PryorBusiness Member
Real Estate Broker · Oklahoma City · Member since 2026 · 14 posts · 10 votes
2mo
It depends on where you go and what you buy. Markets like Oklahoma City are affordable and national builders are giving deals and subsidizinf rates. We just sold a new Lennar home that is 2047 SF, 4 bedroom at $249,400 in a quality school suburb. The included the fence, blinds, garage door opener, and added washer, dryer, and refrigerator. They are give the investor a rate of 5.375% fixed with 25%. The cash flow is positive from $395 to $495 per month with property management fee included. There are other excellent secondary markets to invest in. D.R. Horton and Lennar are competing for being number one so this helps the investor and ther owner-occupant.
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- Dan H.Pro Member
  Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
  2mo
  Quote from @Joe Pryor:
  
  It depends on where you go and what you buy. Markets like Oklahoma City are affordable and national builders are giving deals and subsidizinf rates. We just sold a new Lennar home that is 2047 SF, 4 bedroom at $249,400 in a quality school suburb. The included the fence, blinds, garage door opener, and added washer, dryer, and refrigerator. They are give the investor a rate of 5.375% fixed with 25%. The cash flow is positive from $395 to $495 per month with property management fee included. There are other excellent secondary markets to invest in. D.R. Horton and Lennar are competing for being number one so this helps the investor and ther owner-occupant.
  
  Some thoughts:
  - I suspect virtually every experienced RE investor would not consider the scenario you describe as passive. I suspect Don was refering to syndications (as was indicated in my responses) but I think REITs and NNN may qualify as passive. I suspect most experienced RE investors would not consider traditional residential RE passive, even with a PM.
  - I would like to see the underwriting that shows that return and that cash fliw.
  - you invest in residential RE to achieve a return just a bit above preferred money market or just over 50% of the lifetime S&P return.
  I expect my RE investments to project to recover investment in 4 years maximum. 5.375% return is almost 14 years to recover the investment. I do realize cash flow is likely to increase with time and ideally there is appreciation, but I invest in RE to make life changing impact. That seems very unlikely at those projected return/cash flow.
  Good luck
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Evan Polaski
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
2mo
@Dan H., I think you misread Joe's comment. The 5.375% is the mortgage rate Lennar offered his buyer. He is also very thinly veiling his own marketing.

"I am a realtor in area X. I just represented a buyer in this area who is getting great returns. This area is great for investors because it is so affordable, has a great school district..." He all but says "Call me at 123-456-7890 and I will help you buy your dream home".

I guess I am just feeling feisty after catching up on the back and forth between Todd and others.

But to bring this back to original topic: passive investing requires diligence and realistic expectations. If you let someone sell you a dream of doubling your money in 2 yrs through passive investments, then just know they are either lying or, more likely, taking on significant risks.
BUT: Passive investing is not a specific type of investing. As noted, some people define it as writing and check and being off the hook, which primarily falls in syndications and REITs.
Some define it as income procured through passive means, like the IRS, in which case all real estate is "passive". And there is a lot of space between those two definitions.
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Don KonipolBusiness Member
OP
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
2mo
Here is my viewpoint concerning passive investing and NNN leased property. Other investors may agree or disagree. Please, no personal insults if you disagree, LOL

Active vs passive investing is not an absolute, its more of a spectrum. REIT investing falls extremely toward passive for instance; apartment investing is somewhere, depending on how you manage it, from moderately active to moderately passive. Buying, repositioning with upgrading and repairs, and selling a shopping center is at the extreme active end.

Now for 3N - depends on whether the property has a long term left on the lease or a short term; whether the tenant is a credit tenant; a non credit tenant, or a no credit tenant, and whether the lease will be renewed or not. A lot of investors as sold the investment as passive, when the lease ends or team tenant defaults they find out that passive has become active. A perfect example is a Dollar General that lease has expired, DG chooses not to renew instead builds a bigger, fancier, newer DG store across the road. Your passive investment just became a very active investment.
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Jamie Parker
Real Estate Investor · Memphis, TN · Member since 2016 · 417 posts · 140 votes
2mo
@Dan H. @Evan Polaski @Evan Polaski

@Evan PolaskiPassive Investing its tough to find. Airbnbs STVR are difficult. If you have a tier 1 operator then you can out earn the competition. Having a NNN in place pretty much tracks alongside a commercial property [office, retail, flex, light industrial]. Thats not a completely passive investment. i think the term passive should be revisited. The "set it and forget it" approach to investing can only be found if you give away control. Having property management in place should be considered semi-passive.

Taking a passive approach because you have a property manager could leave you in a bad spot. I have seen personally, first hand. in the last 6-9 months, 3 out of state investor getting absolutely hosed buy property management. 2 out of state investors that want out. Assets are performing but they want out.
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- Dan H.Pro Member
  Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
  2mo
  Quote from @Jamie Parker:
  
  @Dan H. @Evan Polaski @Evan Polaski
  
  @Evan PolaskiPassive Investing its tough to find. Airbnbs STVR are difficult. If you have a tier 1 operator then you can out earn the competition. Having a NNN in place pretty much tracks alongside a commercial property [office, retail, flex, light industrial]. Thats not a completely passive investment. i think the term passive should be revisited. The "set it and forget it" approach to investing can only be found if you give away control. Having property management in place should be considered semi-passive.
  
  Taking a passive approach because you have a property manager could leave you in a bad spot. I have seen personally, first hand. in the last 6-9 months, 3 out of state investor getting absolutely hosed buy property management. 2 out of state investors that want out. Assets are performing but they want out.
  
  >Passive Investing its tough to find. Airbnbs STVR are difficult. If you have a tier 1 operator then you can out earn the competition.
  I think syndication offerings are a dime a dozen. Similar for reits, but in generally reits project lower return than the syndications. Good ones are clearly more rare, but there are so many LP offerings that there is no shortage.
  I suspect I am one of the 5 longest STVR owners on this site (since 1999). Even with PM/co-host, they are not what I consider passive. If you self manage, they are a lot of work as it is basically a hospitality business. Process can help but processes take work to create. Most processes may not make sense if you are self managing one or two STR units.
  As for PMs…. PMs require oversight. There needs to be an asset manager that interfaces with the pm and check financial statements and makes other decisions regarding the asset. This typically falls on the owner. Proper asset managing should be able to detect pm issues early.
  Our STRs have a co-host (super host that charges me a preferred rate) that does all guest communication/interaction, coordinates cleaning, coordinates most maintenance but typically uses my maintenance crew (my crew is better than her maintenance people) which does save us some money but can cause impacts to my efforts (she used to always ask but it was happening enough that she has stopped asking. Also she pays more for her other owners so my crew prefers to work for her other owners but know they get more than pay working my jobs).
  If you are not finding sufficient syndication offerings, you can join a passive investment group or website (such as BP‘s Passive Pockets) to get exposed to more syndications than you can vet.
  
  good luck
  
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- Jamie Parker
  Real Estate Investor · Memphis, TN · Member since 2016 · 417 posts · 140 votes
  2mo
  @Dan H. I'm starting my own small investment group. I'm not a high income earner I just think the conversation is interesting. The goal is to transact 1000 doors in one year. After years of wholesaling, I've decided I've learned enough about the numbers and it's time to move towards raising capital. Nothing fancy; multi family buy and hold, new construction and renovating houses, and wholesaling.
  
  im not setting up to be Grant Cardone but 25-50 million AUM would be pretty cool to achieve in the next 5-7 years.
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Joshua Patrick
Investor · Irvine, CA · Member since 2023 · 27 posts · 4 votes
2mo
Great points, Don.

I think the operator is ultimately the investment. The project matters, but I've found that communication, transparency, alignment of incentives, and a demonstrated track record often outweigh an extra point or two of projected return.

Out of curiosity, when you're evaluating an operator today, what are the top 2–3 things that immediately build (or destroy) your confidence?
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Jimmy LieuBusiness Member
Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
2mo
Quote from @Don Konipol:

Why is successful passive investing in Real Estate so difficult?
Well, two reasons
1. The passive investor is attempting to obtain a higher risk reward ROI than the general market allows. This can only be obtained by a superior ability to choose which passive investments to invest in. Almost all investors can do a rudimentary due diligence analysis or have an advisor who can. The few that are able to uncover the real "hidden gems" either have SUPERIOR analytical ability (very difficult) or do a much more thorough and time consuming analysis - which in itself raises the question of whether or not the investment is indeed "passive" .
2. By the nature of the investment structure (what used to be called a limited partnership, but now likely to be a non managing member LLC) the MONEY has no ability to "right the ship" should something go wrong, and has total reliance on the syndication or fund manager, who may or may not have aligned interests, positive incentives, and or the managerial expertise, experience and motivation to protect, secure and enhance the subject investment.
Don, I think those are two big reasons, especially the alignment issue. I'd also add that a lot of people underestimate sponsor selection. A great market and a great deal can still underperform if the operator isn't a strong asset manager. I always look at how they've handled past projects, how they communicate when things don't go as planned, and whether they have meaningful capital invested alongside their investors. Passive investing can absolutely work, but in many ways you're underwriting the operator just as much as you're underwriting the property. Happy to connect and answer any questions you have!
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Mark RobertsonPro Member
Investor · Salisbury, NC · Member since 2014 · 314 posts · 386 votes
2mo
I think the important distinction is that passive investing removes operational responsibility, not investor responsibility. The sponsor manages the property, but the LP still needs to perform substantial work before investing and monitor performance afterward.

I focus on the operator first, then the deal. That means reviewing full-cycle results, comparing realized returns with original projections, understanding the complete fee structure, and examining how the sponsor behaved when prior deals struggled. After investing, I watch actual distributions, remaining unrealized value, leverage, occupancy, and progress against the original business plan.

A projected IRR by itself tells very little. It can depend heavily on optimistic valuations, refinancing assumptions, and exit timing. The most useful information often comes from former investors, lenders, vendors, and independent market participants.

Passive should describe your role in operations—not the amount of diligence required to protect your capital.
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Mark RobertsonPro Member
Investor · Salisbury, NC · Member since 2014 · 314 posts · 386 votes
2mo
I think there’s an important distinction between being operationally passive and being intellectually passive.

An LP can absolutely outsource property operations. What I don’t think you can successfully outsource is the responsibility for deciding who gets your capital and monitoring what happens afterward.

In practice, I’ve found it useful to underwrite passive investments in three layers:

Sponsor: full-cycle history, integrity, personnel, references and specifically how they handled investments that went badly.

Structure: debt, fees, waterfall, conflicts, capital-call provisions, investor rights and liquidity.

Asset/business plan: purchase basis, realistic revenue assumptions, reserves, capex and a downside case that does not depend on everything going right.

After investing, good reporting matters. If performance deviates from underwriting, I want to know what changed, why it changed and what management is doing about it.

So I agree that passive real estate isn’t necessarily “easy.” But I’m not sure the goal needs to be finding hidden gems. A repeatable process that helps avoid permanent losses may be more valuable than consistently trying to identify the highest-returning deal.
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Evan Polaski
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
2mo
@Mark Robertson, I know this is getting into more assessment than the original post really set out, but since we already dove deep into each person's subjective definition of "passive", this train of thought is at least more closely aligned to OP.

As it pertains to track record, I think this is far more nuanced for two reasons:
A) Many sponsors that got aggressive in 2021/2022 (and I would argue still are on their newer acquisitions) have not sold properties since 2022. So a track record is only reflective of heyday times and primarily rewarded anyone that bought. If, particularly in MF, they bought in 2021, sold in 2024/2025 and still did well, I would give that far more credence.
B) I am familiar with a sponsor that sold a deal for a net 30+% IRR back in 2022, I believe. The NOI at time of sale was 30% below initial projections. This sponsor got rewarded for buying, not operating, not special insights.
The solution to both is tracking current property operating performance to initial projections. If they bought in 2021, still own and NOI is tracking with or above projections you can better see how conservatively they underwrite. And it takes out mistakes that may have been made relative to financing structure (hopefully they are applying lessons to new deals) and/or market forces in valuations. But the basic track record: 20 deals sold netting 24% net to LP IRRs and "never lost a dollar of investor capital", commentary can very easily hide the risks they took in financing structures, true signs of operations capabilities (or lack thereof), etc.
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