Crowdstreet deal analysis

[Graham Dersley]

Can someone walk me through how to analyze a potential investment on a site like Crowdstreet?  For example, there is this deal available to invest in the adaptive reuse of a historic property:  https://app.crowdstreet.com/properties/kex-mp/

Target investor IRR is 20.1% but these numbers are optimistic projections, right?

Are we mainly looking at prior performance and the business plan of the developer?  For those of you with experience investing in these types of deals, what makes you choose one over another?

[Saul L.]

@Graham Dersley - This is really not a topic to be covered in a forum post. Analyzing RE syndication deals is a complex task- but can be honed, practiced and improved with experience as you see more and more deals. When I started out a few years ago in the space  I was pretty lost- I still dont claim to be an  expert- but now 90% of the deals dont get past my initial sniff test. The other 10% may get a deeper look, with ones that I eventually go for generally taking me 10s of hours of DD  before pulling the trigger.

There are many topics to get an understanding of- Investment structure, product type (office, retail, multi family etc.), strategies, capital structures, evaluations, fees etc. to mention but a few. IMO the first and foremost check is evaluating the Sponsor- In these kind of investments you are betting on the sponsor more so than on the deal.

I highly recommend the book "Investing in Real Estate Private Equity" by  Paul Kaseburg under the pseudonym Sean Cook. It covers all the basics in clear concise explanations.