Series on Transparency Reports

We've been producing transparency reports on real estate deals that LPs are considering for investment. To give a broader audience a sense of what we do, we’re beginning to publish selected reports—redacted to remove sponsor names and property addresses.

The goal is simple: to provide LPs with a free look under the hood and help educate investors about what to look for in offering materials.

For context, each report covers 18 core questions (28 if you include sub-questions). On average:

• 10–13 answered = a deal with “average” transparency.

• 14+ answered = above average.

• Single-digit answers = sub-par.

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It’s important to note that a “No” still provides valuable color—it means the sponsor gave a clear response in the negative. Where sponsors lose points is on “N/A” responses (not available), which signal missing information that should reasonably be disclosed.

The first report reviews a multifamily value add deal in Texas. A large area thats getting hit with some distress. It falls into the average category—some questions remain unanswered, but overall it’s not terrible. In the coming weeks, we’ll publish a range of examples: the good, the average, and the outright ugly.

We hope you find these useful. Let us know if you have any questions or feedback.

Documents Provided:

Investment Summary
Offering Memorandum (OM)	X
Private Placement Memorandum (PPM)	X
Partnership Agreement/Operating Agreement (PA/OA)
Subscription Agreement
Excel Proforma (proforma)

Due Diligence:

Yes = Info provided with answer of “yes”

No = Info provided with answer of “no”

NA = The info was not provided and we cannot answer.  “Not Available”

Question and (where information can be sourced from)	Yes/No/Not Available
1.        Is the address of the deal listed in any of the documents? (Investment Summary, OM, PPM)	Yes
2.        Is the GP forming a legal entity, e.g. LLC, LLP, SPV? (OM, PPM, Operating Agreement)	Yes
3.        Did the GP provide an organization chart? (PPM)	Yes
4.        A) Has the GP exited deal/s in this state before? (Investment Summary, OM, PPM)	NA
B) Has the GP exited deal/s in this MSA before? (Investment Summary, OM, PPM)	NA
C) Does the GP have ongoing deal/s in this state? (Investment          Summary, OM, PPM)	Yes
D) Does the GP have ongoing deal/s in this MSA? (Investment Summary, OM, PPM)	Yes
5.        For value-add, new developments, has the GP provided a list of competing new developments in the area? (OM, PPM)	NA
6.        Was a data or sensitivity table provided? (OM, PPM)	NA
7.        Is the GP putting cash equity into this deal? (OM, PPM)	NA
8.        Is there a fee structure disclosure in any of the docs? (OM, PPM, PA/Operating Agreement)	Yes
9.        A) Is there an acquisition fee? (OM, PPM, PA/Operating Agreement, Proforma)	Yes
B) Is there a development fee? (OM, PPM, PA/Operating Agreement, Proforma)	No
C) Is there an asset management fee? (OM, PPM, PA/Operating Agreement, Proforma)	Yes
D) Are there any other fees? (OM, PPM, PA/Operating Agreement, Proforma)	Yes
10.  A) Net of GP fees on day 1, is the GP (excluding any co-GPs, putting in more than 5% of the total equity in the form of cash? (OM, PPM, PA/Operating Agreement, Proforma)	No
B) “”… >2% of the total equity in the form of cash?  (OM, PPM, PA/Operating Agreement, Proforma)	No
C) “”…>0% of the total equity in the form of cash? (OM, PPM, PA/Operating Agreement, Proforma)	No
11.  Has the GP provided their source and terms of the debt? (OM, PPM)	Yes
12.  Did the GP provide access to a model in excel format with formulas? (Proforma)	NA
13.  Is there a rollover feature in the waterfall to add any shortfall in a pref hurdle from one year to the next? (Proforma)	NA
14.  A) Is the pref hurdle calculation based on the initial LP capital contribution? (Proforma)	No
B) Is the pref hurdle calc based on the LP’s unrecovered capital? (Proforma)	Yes
15.  Is the GP able to earn a promote prior to LPs getting a full return of their capital and an initial pref hurdle? (OM, PPM, Proforma)	No
16.  A) Is there a mandatory capital call provision? (PPM, PA/Operating Agreement)	Yes
B) Is there a voluntary capital call provision? (PPM, PA/Operating Agreement)	No
17.  Is there a limit on the indemnification clause for fraud, negligence, mismanagement, willful misconduct, or any kind of action in bad faith breaching the agreement? (PPM, PA/Operating Agreement)	Yes
18.  Will the GP have a third-party accountant doing taxes for the company and the entity holding the deal? (OM, PPM, PA/Operating Agreement)	NA
Total number of questions answered	11.5

Executive Summary

Out of 18 key questions, 11.5 were answered, while 6.5 were marked “Not Available” (NA). The General Partner (GP) provided useful responses to several critical areas in the Private Placement Memorandum (PPM), particularly around the fee structure and legal framework.

That said, a few notable gaps collectively limit our ability to fully assess the sponsor and the offering. Questions 5, 6, and 7, in particular, warrant further discussion. While the sponsor includes a map of comparable properties, our intent with Question 5 is to evaluate new developments, including properties currently under construction or in lease-up. This data was not included, resulting in an NA rating.

Additionally, although the PPM discloses the fee structure and includes an organization chart, it is unclear how much cash equity the GP is contributing personally. The GP notes a 1031 exchange contribution, which they classify as equity; however, this contribution originates from a separate LLC owned by other parties. Our question specifically refers to direct cash equity from the operating GP, and that was not disclosed.

We also did not find a data or sensitivity table in the PPM, and no Excel proforma was provided. This makes it difficult for an LP to validate assumptions or assess the plausibility of projected returns.

We assigned a partial score (0.5) for Question 4, as the sponsor referenced another nearby investment but did not include a full portfolio list or details of past exits—which could help assess track record. We assigned a full score (1) for question 11 which we marked as yes despite the GP only providing the potential source of the debt. However, they did provide significant color around their communication with the lender.

It’s important to note that not all questions carry equal weight—each LP will prioritize different elements depending on their goals. In this case, the GP appears to operate a substantial portfolio across the U.S. and may choose not to provide further documentation to prospective investors.

If we were personally considering this opportunity, we would request the following before proceeding:

1.     Confirmation of how much direct cash the GP is investing (beyond the 1031 exchange)

2.     An excel-based proforma

3.     A data or sensitivity table which could be in the excel-based proforma

Please remember: we strongly encourage you to conduct your own due diligence, ask additional questions, and ensure any investment aligns with your risk profile and portfolio goals.

Transparency Score:

11.5 out of 18 — Average.

This score reflects a fair level of transparency, particularly with the inclusion of a PPM, which typically provides the most substantial information among offering documents. 

Key Takeaway / Major Risks:

While we generally avoid commenting directly on financial projections, in this case we lack the necessary material to make any meaningful assessment. The absence of a proforma or data table prevents evaluation of return assumptions, capital efficiency, or development spreads. When this level of financial opacity exists, it naturally raises questions about investment discipline.