When choosing a real estate sponsor for an investment opportunity, it is essential to do your research. It is imperative you are thorough in looking over all details. Mainly, you want to put the sponsor under a microscope and want to see relevant track record and skin in the game. Our experts at Luxe Crowdfunding will help you understand this further. Our company specializes in real estate crowdfunding.
In buy and hold equity transactions, the character and experience of the real estate company that will syndicate out the opportunity and then operate the project are of paramount importance. Investors will need to be reasonably confident that the operator has a solid reputation, track record, and also has the appropriate skill and knowledge to be able to manage commercial real estate in a trustworthy and professional manner. To gain the necessary assurance about a syndicator proposing a project, some due diligence steps are advisable.
Steps for Choosing a Real Estate Sponsor
As previously stated, there is a lot of research that needs to be looked into when choosing a sponsor. It may seem intensive, however, it will help immensely in the long run.
When introduced to a real estate company, an investor should first establish the company’s experience level and track record. Most reputable companies can serve up an extensive portfolio of past investments. This will entail detailed operating histories and financial results available for investors meeting them for the first time. Ask yourself these questions when looking over the provided information. Do the principals of the company have many years of combined real estate investing experience, and a track record of success? Does the company have a history of attractive sourcing investments? What is the total capitalization of its past commercial real estate investments? What is the company’s relevant experience in underwriting, deal structure, negotiation, and legal/financial strategies?
Also be sure to investigate the company’s general approach to commercial real estate investing. Does it specialize in a particular market sector or niche that is “below the radar” of most competitors? How capable is the operator in assessing investments and determining the risks? What is its ability to evaluate possible turn-around plans and to analyze future growth potential?
Be sure to ask yourself what is the nature of the fees that are in connection with a project. How do they compare with the fee structures of other operators? Will it charge financing, property disposition or development fees? Is a management fee based on a percentage of capital actually contributed, or is it based on capital that is committed but not yet delivered? Are there other special expenses outside for which the operator might expect compensation, and if so is there a maximum to such amount? We are leaders in real estate crowdfunding.
Call Us Today For More Information
As an investor, you need all the information to be successful. We have all the information you need, including a real estate sponsor. Luxe Crowdfunding is here for you. Call or contact us today for more information. We are a great resource, Florida. We know all the facts when it comes to learning how to invest in real estate. Our professionals are the leaders in real estate crowdfunding.