Investment Summary At A Glance

[Justin Goodin]

Some investment summaries consist of gorgeous graphics and iconography, professional photos and clear tables. Others are written like textbooks and include haphazard low resolution phone pictures someone probably threw in at the last minute. Sigh.

But here’s the thing. Regardless of what an investment summary looks like, you have to be able to swallow your initial impressions (good or bad) and look at the numbers and business plan for what they really are.

If you decide to invest because the investment summary looks pretty, you may be putting yourself at risk, if you haven’t done proper due diligence on the deal and the team.

• Project name (often the name of the apartment complex)
• Photos of the property and area
• Overview of the submarket
• Overview of the deal
• Details of the business plan
• Projected returns and exit strategies
• Detailed numbers and analyses
• Team bios

In a 1 page summary, you get bits and pieces of each of these elements, though you would need the full investment summary to get all the details.

If this executive summary landed in my inbox, here’s what I would do. I’d start by skimming through the whole thing.

In skimming this executive summary, here are the things that would jump out at me:

• Off-market
• Value-add
• Track record
• Strong submarket
• Proven model
• Equity multiple
• Unit count

[Evan Polaski]

@Justin Goodin, there is a navy seal saying: How you do anything is how you do everything.  While I can certainly find exceptions to this, I generally agree.  If a sponsor doesn't take the effort to make a good impression with a well thought out offering package, I have to assume they will also be lackadaisical in their operations, they won't care about getting K-1s out on time, etc.

But, what you said is also true: I have seen some very slick marketing materials that I will never invest in.  If a sponsor is only showing gross or project level returns, I will immediately hit delete.  As an investor I only ever care about net returns.  

From there, if it is a specific asset, you need to assess the assumptions used.  If it is Fund, I will look at the track record of prior deals and general history of the company/sponsors, as well as general business plan being targeted.