I agree that the deal does not seem good on the surface.

Looking at a credit report is only scratching the surface of making a lending decission and using credit as a justification for more profit is more of marketing ploy by a lender than a true risk assessment.

There might have been an inspection requiring repairs and those repairs were not made in a timely fashion, resulting in a rent abatement.

In this market, if the payments are made in a timely fashion the odds of that lender initiating a call are precisely zero.

I end up being an unofficial mentor to several people who have done business with me in some fashion.

Prepping the surface to create an acceptable substrate woul have been labor intensive.

Good old fashioned MAYBE.

If shingles were a surface that were regularly treated with paint (such as wood siding is) then it might be reasonable to paint.

If on the surface there are red flags never waste your time screening.

Similar in fashion to mutual funds versus hedge funds.Also, REITs tend to be more liquid, whereas PERE typically require you to park your money with them for a period of time, often 10 years.Here's a few links which may be helpful:http://en.wikipedia.org/wiki/Private_equity_real_estatehttp://www.wallstreetoasis.com/forums/real-estate-pe-vs-reithttp://www.cpexecutive.com/newsletters/capitalmarkets-newsletter/reitscolumn/reits-versus-real-estate-private-equity-funds-who-wins/Damon