How to Vet Real Estate Sponsors (Part 2): Communication, Credibility, and Red Flags

Overview

In this episode of the Ironclad Underwriting Podcast, Jason Williams and cohost Frank Patalano continue their deep dive into how investors should vet real estate sponsors and operating teams. Building on Part One, this conversation focuses on common misdirections, inflated track records, communication breakdowns, and excuses investors often hear when deals underperform.

Topics Covered

1. Why vetting the sponsor is as important as underwriting the deal
2. Inflated track records, door counts, and misleading asset claims
3. The difference between being active in a deal versus passively listed on a team
4. Red flags around distributions, delays, and vague explanations
5. How poor communication erodes investor confidence
6. Property management failures and why operators must take responsibility
7. Refinancing delays and how sponsors should communicate challenges
8. Due diligence on teams, social media research, and reference checks
9. Why investing in a deal is like entering a long term relationship

Quotes

1. “You’re not just investing your money. You’re investing everything. It’s almost like a five year long marriage.”
2. “Over communication is always better than under communication, especially when a deal isn’t performing.”

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