Jeremy Roll with the Jeremy Roll investment group wrote an excellent article about the 10 steps when reviewing a passive Real estate opportunity. Here is a summary of the article and you can read the entire post here
- Make sure the risk profile of the investment meets your criteria
- Make sure the manager has plenty of experience
- Only invest if the deal has a preferred return (The investor gets paid first)
- Review that the profit splits are fair
- Make sure the Pro Forma has conservative projections
- Understand and believe in the business plan and overall strategy
- Research the location and make sure it’s a good fit for the investment
- Call the sponsor and get comfortable with them
- Perform background checks on the sponsors
- Reviews the PPM to make sure there are not any hidden anti investor provisions.