Even sophisticated folks rely, at best, on databases like CoStar and REIS which hardly provide any big data analytics.

Challenges were contractor stole flooring material and payroll.

Cozy wasn't quite as sophisticated, but did the trick for the last year.

However, those amounts are not paid through payroll deductions.

If you paid $10k for the down payment and closing costs of the investment, then your very first cash flow is NEGATIVE $10k.I think because there are so many investors that have not learned the sophistication of the calculations, they become emotionally against a NEGATIVE cash flow even though the very FIRST cash flow is NEGATIVE.That's because they really only understand a definition of Cash Flow which does not actually involve the flow of cash!

In the Commercial space, all parties are deemed sophisticated enough to look out after their own interests. 

Think insurance, payroll, unemployment insurance, and the list goes on and on, but at the end of the day just be prepared.

These types of deals will be difficult to pull, though, because they normally involve a higher degree of sophistication and commitment from a seller.

There will propabaly be investor qualifications (accredited or sophisticated) but it’s a great alternative that allows folks who want to get out of a participation (hands on) ownership role and 1031 up into a more risk averse large MF building while being hands off.The sponsor will take fees of course like a normal syndication (most likely) and the returns may be slightly less, but you should still share the appreciation rights and ultimately just continue to 1031 up and up.Happy to answer questions.  

One other wrinkle in this whole thing is that more sophisticated investors look not just at the cap rate they are buying at, but at what the cap rate will be once they have stabilized the property.