Investing in a building

[Jawad Khan]

Hey guys, 

My first post here. I have been listening to bigger pockets podcast for a while now and really appreciate the knowledge everyone shares, thank you for that. 

I have come upon a investment opportunity, I am a realtor and my brokerage is working on buying some land and putting up a building for their headquarters. The full cost of land + construction is around $8M and they are selling 20% equity share in class a stocks in the company. They are willing to sell shares of .5% at $40k. They are guaranteeing a 8% yearly payout per year on each $40k investment. The building is going up in a pretty nice area with great potential for growth. I have never done this so looking for advice for what I should be careful about and questions I should ask. Any help is appreciated. Thanks in advance! 

[Account Closed]

Not sure how they can guaranty an 8% annual payout.  Are they selling shares in the operating company or in a partnership that will own the land and building?  If the latter, what are the lease terms?  Are they in line with market?  What is the proforma hold period?  Does it match your investment objectives?  Will the brokerage be the only tenant or is this a multi-tenant building?  Is debt being used?  What sort of promote does the investment come with (what portion of the profits will go to the general partner)?