@Barry Dameshek You are asking great questions. Your instincts are all correct and have had great responses thus far from others. Rather than just repeat those general items that have already been mentioned I can bring a different perspective to the conversation that may make you feel more comfortable vetting this potential sponsor because I am a sponsor in multifamily syndications, a younger one, and also newer to the strategy so very similar to the sponsor you mention. Because of that, I can take this from the other side of the relationship. My opinion is If an investor is considering placing his/her capital there is no correct way to go about their due diligence it because it all comes down to what makes you as an investor comfortable. For example, I have one investor who does financial auditing for a living. His focus, of course, was for us to send him financial information so he could poke through it. Another Investor said you can tell a lot about a man by meeting his wife so I said: "great let's have the wives and us all go out for dinner". My point is asking for whatever makes YOU comfortable is appropriate.
A successful syndication boils down to one thing and that is trust. Will the GP's do what is needed to make sure the investment is successful? From sourcing leads to executing on operations it all comes down to trusting them to get the job done they say they will? Also when s#%t hits the fan will they be the first person there with gloves a broom willing to do whatever is needed to clean up the mess and get back on track because if anyone tells you it will go just as planned their lying I often tell potential investors I am a younger guy and plan to be doing this another 30-40 years. If we do business on a deal this year great if we don't do business for another 5 years because we have to build up that trust that works for us too.
At our company, we view capital a little differently rather than just thinking of it as money coming from someone's bank account we always view it as the time that person had to trade to earn that money. Sure some of our investors have lots of money in the bank but at some point in their life they busted their butt and traded a portion of their life to earn that money so rather than view our investors capital as money to fund the deal we view it as small portions of that person's life they are entrusting us with. I bring this up because if someone raising money has this outlook(which I believe they al should) being asked things like "can you send me your bank statements before and after closing to prove you did in fact invest" or " I want to meet your wife" Or whatever in the world you need to build trust that is what they should be willing to do if they hold the capital they are borrowing to the standard they should.
Best of luck of on your vetting!
