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10 questions to Ask Before passively investing After COVID

What Questions Should I Ask Before Passively Investing In A Real Estate Syndication Now (After Coronavirus)?

When investing in a real estate syndication you are truly investing in the deal sponsors, the team that is going to be managing the deal and provide you with your means to earn passive income. Your investment is an act of trust in the integrity and competency of the deal sponsor to be able to execute their business plan as described in the offering materials of the investment opportunity. Given the highly critical and central role deal sponsors play, passive investors need to make sure they have clarity when investing, especially during uncertain times.

We have come up with some of the most important questions a passive investor should ask a deal sponsor before continuing to invest with them or investing with them for the first time. As you may note there are some questions on here that you should have been asking even before the Coronavirus pandemic, but they are even more important to know now. Keep reading to find out more.

1. How has your investment criteria changed since the onset of COVID-19?

The deal sponsor’s investment criteria should not have changed. They selected their investment criteria for a reason. As a passive investor you want to be comfortable that the deal sponsor is not going to be taking on inferior deals just for the sake of doing a deal or earning their acquisition fees at the risk of the passive investors seeing poor returns. Instead of changing their investment criteria a sponsor should be working harder to increase deal flow and find conforming investment opportunities.

If the investment thesis of the sponsor has changed you should get an understanding of why the sponsor has made this change and if the deal sponsor will be a good fit with your