Passive Investor Checklist

Curious about the things to know when thinking about passively investing in a real estate deal? Then check out the handy questions below to ensure that you cover all your bases:

  1. Who is the operator of the deal?
  2. Do you know, like, and trust the operator?
    • What is their track record – How are their current deals performing?
    • Track Record – What is their communication style outlined in their investment package as well as other investor’s experiences?
    • Track Record – How have they handled deals that have not gone as planned?
    • Have you done a background check?
    • Have you asked other investors about their experience with them ie. Level of communication and timely distributions?
    • Is there a priority to return all the passive investor’s capital before the sponsor receives a return
  3. What is the address of the property?
  4. What is the current economic and physical occupancy of the property?
  5. What are the demographics of the apartment’s tenants in terms of occupation and income?
  6. What is the population growth over the past 10 years for the city or the major city close to the property?
  7. What is the house price growth?
  8. What is job growth?
  9. What is the household income growth?
  10. How has crime changed over the past 10 years?
  11. What is the level of the schools in the are of the property?
  12. What is the unemployment rate? Is it greater than the national average?
  13. Who are the major employers in the market?
  14. What are the major industries in the market?
  15. How diverse are the jobs/employers/industries in the market?
  16. What are the current events – any news on new businesses coming or leaving and are there any major infrastructure projects?
  17. What is the average rent at the property (800 minimum is ideal)?
  18. What is the business plan the operator intends to execute?
    • Is increasing rents apart of the business plan? Then understand the planned dollar amount of the increases and whether it is reasonable to increase rents and what factors in the market and property that makes the sponsor believe that this will be possible to do?
    • What sensitivity analysis has been done on the business plan?
    • Has the sponsor thought of worse case scenarios and how they intend to mitigate the risk of these scenarios happening?
    • What are the planned exit strategies for this investment? (Ideal to have 3)
    • What are the planned cash reserves for this property and the reason for the amount of cash being held?
  19. Does the plan make sense give the market and has the operator executed this plan before?
  20. Will professional property management be used?
  21. What is the profit split after the preferred return?
  22. Are you comfortable with the hold period and projected returns?
  23. Do the terms in the private placement agreement agree with the investment package provided to you?
  24. Terms you should check in the Private Placement Memorandum before signing:
    • Know what the fees being charged are Acquisition fees; asset management fees, refinancing fees, or disposition fees.
    • Is there a preferred return and how much is it?
    • What are the allocation splits of income and sales proceeds?
    • Is there a priority to return all the passive investor’s capital before the sponsor receives a return?
    • What is the hold period of investment?
    • Check that there is a bad boy carve-out in the PPM. This protects investors if the sponsor team is negligent.
  25. Do the anticipated monthly cash flow and anticipated cash at sale satisfy the expected return you are seeking on your money?

Anything confusing or doesn’t make sense? Wish you knew more about something mentioned or not mentioned? The drop me an email at or shoot me a message on Instagram or Facebook! I love hearing your feedback, suggestions, and thoughts!


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About the Author

Lisa is the founder of Axcel Capital, a real estate company that invests with investors solely multifamily investments across the United States. At Axcel Capital, Lisa and her team focus on buying apartments with investors and shares the profits. This strategy enables her investors to build wealth and passive income through investing in conservative, high-quality multifamily assets.

Lisa is the host of the Level Up REI podcast where she interviews real estate investors on their stories and lessons learned. After a decade of working in the financial services industry, Lisa found investing passively in real estate syndications and was intrigued by the business opportunity to invest in real estate while also providing the opportunity to others to do the same along with her.

You can learn more about passively investing in high-quality multifamily assets that provide cash flow and strong returns at


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