ChecklistReal Estate

Real Estate Syndication Due Diligence: 47 Questions to Ask

Before you wire $50K to a sponsor, here's the complete checklist we use to evaluate deals.

December 10, 2025

14 min read

Real estate syndications offer access to institutional-quality deals with professional management. But they're also illiquid, complex, and entirely dependent on sponsor execution. Thorough due diligence isn't optional—it's essential.

Before You Start

Most syndications are private placements under Reg D. They're only available to accredited investors, and there's no secondary market. Once you invest, you're locked in for 3-7 years. Never invest money you can't afford to lose entirely.

Part 1: The Sponsor

The sponsor (general partner) is the most important factor. A great sponsor can salvage a mediocre deal; a bad sponsor can ruin a great one.

Sponsor Questions

1How many deals has the sponsor completed?

2What is their track record on realized returns vs. projections?

3Have they ever had a deal go bad? What happened?

4How much of their own capital is in this deal?

5What is the management team's experience with this property type?

6Can you speak with investors from previous deals?

7What is their preferred equity structure (waterfall)?

8How do they handle capital calls if the deal underperforms?

Part 2: The Deal Structure

Understand exactly what you're buying, what returns are projected, and what assumptions drive those projections.

Deal Questions

9What is the business plan (value-add, core-plus, development)?

10What are the projected returns (IRR, cash-on-cash, equity multiple)?

11What assumptions drive these projections?

12What is the target hold period?

13What are the exit options if the market turns?

14What contingencies exist for cost overruns?

15Is there a preferred return? What percentage?

16What is the split after preferred return is paid?

Part 3: The Property

Understand the physical asset, the market, and the specific risks.

Property Questions

17What is the property condition? Any deferred maintenance?

18Has there been a third-party inspection?

19What is the current occupancy? Historical occupancy?

20What are the comparable rents in the submarket?

21What new supply is coming to the market?

22What are the property taxes and how might they change?

23Are there any environmental concerns?

24What is the insurance situation and cost?

Part 4: Legal & Tax Structure

Have an attorney review the PPM and operating agreement before you commit capital.

Structure Questions

25What entity type holds the property (LLC, LP)?

26What are the fees (acquisition, asset management, disposition)?

27How are fees earned—upfront or over time?

28What voting rights do LPs have?

29Can the sponsor make capital calls without LP approval?

30What are the reporting requirements (quarterly? audited?)?

31Is there a subscription agreement? Have you reviewed with an attorney?

32What are the tax implications (K-1 timing, UBIT if using IRA)?

Red Flags to Watch For

Unrealistic projections: 25%+ IRR on core multifamily? Be skeptical.
No skin in the game: Sponsors should invest meaningful capital.
High upfront fees: 3%+ acquisition fees are a yellow flag.
Pressure tactics: "This deal is closing in 48 hours" = walk away.
No investor references: Quality sponsors have happy past investors.
Opaque reporting: Quarterly updates should be detailed and honest.

Bottom Line

Syndications can be excellent investments—but only with proper due diligence. The best sponsors welcome scrutiny. If a sponsor can't or won't answer these questions, move on. There are plenty of quality operators who will.

Download the Complete Checklist

Get a printable PDF version with space for notes on each question.

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