Real estate sponsor decisions can make or break your entire investment. A good sponsor can navigate a bad situation. A bad sponsor can blow up a perfectly good deal.
This episode is co-hosted by Ben Gray, partner and CEO at RSN Property Group. We’re joined by Brian Burke, founder and CEO of Praxis Capital and author of “The Hands-Off Investor”.
With more than 30 years of experience, Brian has operated through multiple market cycles and acquired over a billion dollars in real estate. He’s seen the run-ups, the corrections, and exactly what happens when deals are built on shaky foundations.
In this conversation, he shares what actually matters when evaluating a real estate sponsor in today’s environment.
We break down the key things you need to look for when evaluating a sponsor and how to avoid the costly mistakes that many investors make. We talk about the right questions to ask, the sponsor’s track record you should focus on, and why a sponsor’s debt strategy and capital stack can shape the entire outcome of a deal.
If you’re investing passively or thinking about it, this episode will give you a checklist to confidently vet a real estate sponsor and protect your capital.
Let's dive in!
Key Takeaways:
- 00:00 Intro
- 02:29 Chase sponsors, not deals
- 04:13 Market trends and making sense of demographics
- 08:35 How to properly vet a sponsor
- 10:24 The harsh truth about ROI
- 12:41 Sponsor due diligence and red flags
- 14:38 Three crucial questions to ask a sponsor
- 16:04 Fees, waterfalls, and underwriting
- 29:17 Debt and maturity dates
- 31:54 Advice for aspiring investors
- 32:58 Outro
Additional resources:
➡️ Check out Brian Burke:
• Instagram: https://www.instagram.com/investorbrianburke/
• Website: https://praxcap.com/
➡️ Visit https://reedgoossens.com/ and:
• Invest passively in multifamily real estate
• Get FREE access to my 100% Passive Real Estate Investment Masterclass
• Take a look at my portfolio
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Investing in the U.S. is a podcast for real estate investors and entrepreneurs who want to break into the U.S. market and grow their wealth!
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