Real Estate is sales, you eat what you kill, so it's no skin off their nose if you don't produce.

On the surface you would think that a higher cap rate is good.

@John Wahba On the surface it looks interesting, but after adjusting some figures that I believe are low, your returns will be decreased.First, $10,000 in closing costs seems low to me.

If you have no skin in the game, I would say 15% is reasonable.

If they sell you a property and then sign you off to a third-party PM, that's another team you need to vet, and means the TK company has less skin in the game (ie once you close, their work is done).They should have solid, data-backed answers to your questions at-the-ready.

This is actually more a gray area than it appears surface-level...IRC Sec 1402(a)(13) was codified in 1977, before LLCs were even on the Treasury's radar.  

Also dont get over your ski tips.. your taking a junior position and as such you should make VERY Big interest like 20% or higher. or part of the profit.. because in essance your person is doing the deal with no skin in the game cash wise.. what happens in a water landing.. and the first goes into foreclosure can you stroke and check and pay the first off. 

At face value, I dont like the deal, but if you are planning to rehab, and the ARV is much higher, and you can get top dollar for rents, who know, the deal might look ok, but im looking at this from the surface.

I will check with sponsor if they are co-investing in this deal to know that whether they have their skin in the game. since you guys are in the syndication offering, so wanted to see if you see anything that is not in-line with market offerings or any other red flags.

On the surface this looks like a good deal.