how investment summaries can help you determine if a deal is good

A Real Estate Syndication Investment Summary: Tips On What to Look For to Find a Good Deal

Virtually every question you will have can most likely be answered within the investment summary if it is drafted well. You can expect to see the business plan, underwriting analyses, market and submarket data, as well as the potential competitors’ product and rent comparables, lots of beautiful pictures, and various other necessary and not-so-necessary information. So, how do you cherry the important information out of an 80-100 page investment summary? Let’s discuss. 

Investment summaries are utilized by deal sponsors to help them raise capital for their projects. This, in effect, is their marketing brochure that is designed to promote their opportunity to investors.

Investment summaries can be A LOT of information that may be overwhelming to some, so we want to go over some high level data points you want to focus on when reviewing investment summaries.

So let’s talk about what you want to look for in an investment summary:

Investment Summary Overview

There can be vast differences in the type of presentation made among investment summaries, but there are some key points within a summary that you should focus on and have an understanding about:

  • The project name – which is most often the name of the apartment community
  • Videos and/or photos of the property and area as well as layouts of the units
  • Why does the deal sponsor team like the market/submarket
  • High-level details of the deal itself
  • What the business plan will be going forward to improve the asset’s value
  • Projected returns, projected timelines of the hold period, and various exit strategies
  • Analyses and underwriting models
  • Bios of the deal sponsor team

Where should you start if you receive an investment opportunity that catches your eye? Start by skimming these key areas:

  • Was it a brokered deal or off-market?
  • Is it a value-add play or how do they plan on adding value?
  • What is the track record of the deal sponsor team?
  • What is compelling about that market/submarket
  • What is the equity multiple of the deal? 1.5X or 2X or 2.4X etc.
  • How many units are in the project?

Was The Deal Brought Through A Broker Or Off-Market?

When deals are acquired without the use of a broker (off-market), it just indicates that the seller would rather not advertise the asset publicly. There are a variety of reasons why a seller will go off-market when they are trying to sell their property.

When you find an off-market deal, it can often be better than a listed property because it can mean much less competition that would otherwise drive the price of the asset beyond what would be reasonable to pay for it. So, in off-market deals, the price is oftentimes more realistic and attainable.

Is It A Value-Add Play Or How Do They Plan On Adding Value?

A value-add investment is exactly what you would think – an asset is in need of some kind of improvements done either through cosmetic upgrades or increased efficiencies, better management structure, or by adding better amenities that would appeal to a wider tenant base.

There are a number of ways to increase an asset’s value that can present opportunities to investors.

Value-add opportunities give the deal sponsor team more ability to increase the value of the asset rather than relying upon asset appreciation through the real estate market conditions. Market conditions do often cause an asset to appreciate, but you obviously never want to rely on that alone.

When a deal sponsor team can improve the living conditions with renovations or added amenities and efficiencies, it can really add enormous value to the asset.

What Is The Track Record Of The Deal Sponsor Team

You want to see that the deal sponsor team has a track record of success. You’ll want to see how many units have they acquired, how many projects have they exited and taken full cycle, when they exited did they hit or exceeded projections, how long have they been operating, what markets do they concentrate on, do they currently own assets in that market or nearby. You want to see that they have the expertise, background, and knowledge to do what they say they can do, and the track record to prove it.

What Is Compelling About The Market/Submarket?

The main factor you want to look for here is that it is a strong market/submarket, that there is a lot of growth, and you’ll want to know why the area is growing. Can you foresee long-term growth in the area? What is the population growth in that market? What is the job growth in that market? How solid are the employers who are bringing in jobs? What type of jobs are they bringing?

Next, you’ll want to see the proximity to amenities like grocery stores, shopping centers, and good employers. You’ll want to see that the apartment community is near good schools. You’ll want to know what new developments are being planned near the project and how much the homes are selling for in the area. The rents need to be less than the cost of a mortgage in buying an average-priced home in the area or else finding tenants can prove to be more difficult.

It’s not a bad idea to conduct your own research on the market, just to learn even more about a potential area that you may be investing in.

What Is The Projected Equity Multiple Of The Deal?

An equity multiple is a metric that is calculating the money you would earn during the life of the project based on your original investment.

So, for example, if you invested $100,000 and after 5 years, the deal sponsors are projecting an equity multiple of 2.0x, then it is projected that you would receive $200,000 paid out over the life of the project (including your initial $100,000 investment).

This $100,000 (over and above your initial investment) is basically your cash-on-cash returns as well as your portion of the profits after the property sells.

Typically, we like to see an equity multiple of 2.0x or more.

How Many Units Are In The Project?

We look for projects that have 100 units up to 500 units or more. The reason for this is that there is a greater economy of scale with being able to manage more units under one roof. There are increased efficiencies with management and maintenance, a better ability to leverage resources, and virtually all operations can be streamlined more effectively.

We personally do not invest in projects with less than 100 units for those reasons, but we would prefer at least 200-250 units and up for our personal investment criteria unless there are other compelling factors.

If You Like The Deal, Act Fast!

If you have extensively reviewed the investment summary, have conducted your own due diligence on the sponsors and the operators purchasing the asset, and done your own research on the market and submarket and you’re finding you want to invest in the opportunity, then I would say, act fast if it’s a good deal.

Good deals fill up extremely fast, sometimes literally overnight, and they are presented on a first-come, first-served basis, so don’t wait if you want in.

Your next step would be to put in a soft reserve if they offer that option, that way you can continue to do more homework if you feel you need a bit more time. But definitely put in the soft reserve to at least reserve your spot in the deal so that you’re not sorry you missed out on a great opportunity. Just know, you can always back out of a soft reserve, it is not binding.


The bottom line is that as you are reviewing an investment summary, you should be looking for the reason why you DON’T want to do the deal. You want to be 100% sure that the investment is right for your personal financial objectives.

Our goal is to help investors have the understanding, knowledge, and confidence to invest in solid real estate opportunities, whether you invest with us or not, we just want you to learn how to Earn Passively & Live Abundantly!

Until next time…

Ready to Learn More? 

The best way for you to learn more about passive investment opportunities in commercial real estate syndications is to join the PCRP Passive Investor Club.

Through the PCRP Passive Investor Club, you’ll get a priority review of all the deals we offer. We’ll work with you to determine your investing goals and then present you with the best deals to meet those goals. We’ll then guide you every step of the way as you invest in those deals.

So if you’re ready to start investing passively in institutional-grade, commercial real estate in fast-growing, climate-resilient markets in the U.S., join the PCRP Passive Investor Club  – IT’S FREE! – and get started on your path to EARN PASSIVELY and LIVE ABUNDANTLY!

If you would like to know more about what we do and how it may be of value to you, please reach out to us anytime.  We’re always happy to help!

how investment summaries can help you determine if a deal is good

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