Diligence questions when evaluating commercial investment

[Mark Kelley]

Hi all, thanks for considering the below questions and providing your thoughts.

I've been involved in SFH investing, and recently have started looking towards investment in other people's multi-family development projects (syndication?).

I am evaluating my first investment opportunity and am admittedly novice to multifamily and syndication. I have received the vision and high level prospectus for the development, a subscription agreement to purchase Class A membership interests in the company, and a sheet outlining past development completions and their returns over the last about 10 years.

I am meeting the CEO of the development and investment company on Friday. My primary question to the BP community is this: What are some of the questions I should be asking right out of the gate to qualify this investment opportunity? 

Here are some of the details that I discern would be helpful to know:

- Property type is senior living center, mix of independent living homes and apartments, assisted living apartments, and care residences. Large shared spaces and common areas. (100 beds total)

- Development with intention to operate, including food services, activities, and care.

- Advertised expected return: Preferred 6%, IRR Year 6 28%, and return on equity 13%

- Development team is a major capital investor and also will be self performing some of the work

Thank you for any insight you may have.