Syndicator Red Flag Checklist
Answer 20 questions about any syndicator and get an instant due diligence grade.
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Educational Tool — Not Financial or Legal Advice
This checklist is a starting point for due diligence, not a substitute for it. A passing score does not guarantee a syndicator is trustworthy or that an investment is suitable for you. Do not rely on this checklist alone to make investment decisions. Independently verify all information, review the PPM and Operating Agreement with a securities attorney, and consult a qualified financial advisor before committing capital.
📋 Track Record & Experience0✓ 0⚠ 0✗
Has the syndicator completed at least one full-cycle deal (bought AND sold a property)?
Has the syndicator been active through at least one market downturn (e.g., 2008 or 2020)?
Does the syndicator have at least 3 years of experience in CRE operations?
Can the syndicator provide references from past LPs?
💰 Financial Alignment0✓ 0⚠ 0✗
Is the syndicator investing their own capital (co-investing) alongside LPs?
Is the GP co-invest at least 5% of total equity?
Does the preferred return need to be met BEFORE the GP earns promote?
Are the projected returns backed by a detailed pro forma (not just "we expect 2x")?
⚠️ Debt & Risk0✓ 0⚠ 0✗
Is the deal using fixed-rate or agency (Fannie/Freddie) debt?
Is the loan-to-value (LTV) below 75%?
If using floating-rate debt, is there a rate cap in place?
Is the projected hold period SHORTER than the loan maturity?
📜 Legal & Structure0✓ 0⚠ 0✗
Has the syndicator provided a Private Placement Memorandum (PPM)?
Does the Operating Agreement include a GP removal clause?
Does the PPM include clawback provisions?
Has the syndicator had zero lawsuits from investors or SEC actions?
💬 Transparency & Communication0✓ 0⚠ 0✗
Does the syndicator provide at least quarterly financial reports to LPs?
Is there an investor portal for accessing documents and distribution history?
Were you given at least 7 days to review the PPM before the investment deadline?
Was there NO pressure to "invest now before the deal fills up"?
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