Essential Due Diligence Questions for Passive Real Estate Investors


Whether you’re new to investing in private real estate offerings as a passive investor, or you’re an experienced limited partner (LP), conducting thorough due diligence is paramount to ensuring your dollars are being put to work in deals that match your risk tolerance. This starts, first and foremost, with asking the right questions.

You absolutely want to talk to the lead sponsor before going too deep into any specific deal. Usually, you’ll get about 30 minutes on an introductory call. That’s not very long, so you’ll want to be organized for an optimal result. There have been more than a few calls I’ve scheduled where I enjoyed the conversation but didn’t get into the meat of what would drive my investment decision.

There’s no way you can get through 50 questions in a half hour, but if you come into the call with a game plan and a checklist, you’ll be in control of getting an answer to the ultimate question – Would I consider investing with this sponsor or in this deal?

The following questions are divided into four sections – General Questions, Deal Level Questions, Legal/Insurance/Tax Questions, and About the Team Questions. This is not a 100% comprehensive list but rather a guide for you to cherry-pick what inquiries are most important to you…and to keep you on track to getting answers.

Let’s start with the broad questions.


1. Have you ever lost your own money on a real estate deal?

2. How about other peoples’ money? 

3. How do you balance risk mitigation with returns? 

4. What is the most difficult challenge you have had to overcome?

5. What makes you different from other groups?

6. May I speak with some of your past investors who have invested with you?

7. May I speak with LPs who have invested in MULTIPLE deals with you?

8. Have you been through any market cycles?

9. How many deals have gone full cycle?

10. What has been your worst syndication deal?

11. Have you ever called unplanned capital and why? 

12. What’s your due diligence process?

13. How are your current deals performing compared to projections?

14. What is your liquid net worth?

15. Have you ever oversubscribed a deal?

16. How often do you provide property updates to your investors?

17. Can I see an example of how you communicate bad news?

18. What gaps do you have on your team that you need to outsource?

Now you should have a good idea about how the sponsor thinks, what their track record is, and how they communicate. However, as you’ve probably heard, past performance does not guarantee future results. Markets change, investment theses change, and people change. You always want to evaluate the deal even if you have had experience and success with the sponsor in the past.

A sponsor with whom I have invested as an LP four times brought a new opportunity to their investors. After getting into the details, I noticed some differences in the underwriting and assumptions versus past deals, that did not make me comfortable. You always want to make sure your risk tolerance remains in line with the sponsor’s.

The next ones are deal-level questions. These are not specific to the underwriting. Questions like “Are your pro forma rent comps accurate?” or “How did you adjust for property tax reassessment?” are beyond the scope of this article. I’ll add that if the answer to the first question in the next section is “no”, don’t wire a cent.



19. May I see your underwriting?

20. Have you gotten quotes from third-party vendors for all your expense assumptions?

21. Have you conducted stress tests on your analysis?

22. Is your “skin in the game” coming from your acquisition fee?

23. What type of financing are you securing for this deal and why?

24. Why did you choose this market?

25. What is your plan for capital reserves for the deal?

26. How long until I start seeing distributions and what is the cadence? 

27. What restrictions are there on GP compensation or clawbacks if the project underperforms?

28. What happens to my ownership interest on a refinance?

29. What is your promote structure? 

30. What is your fee structure? 

31. How detailed of reporting are you willing to share? 

32. What are your worst-case scenarios in this deal?

33. What does your management or acquisition fee cover?

34. If the property over-performs, are the LP’s capped or do they participate in that overage? 

35. Are you sourcing capital anywhere but from retail investors? 

36. If so, what control rights do your equity partners have? 

37. What is the yield-on-cost at stabilization? 


After you get through these questions, hopefully you have a copy of the underwriting file, and you can get to work on matching what you’ve been told to what the spreadsheet is telling you.

The next section is a short one, but very important. You want to know that your sponsor is compliant, properly insured, and has reliable, professional counsel.



38. How do you stay compliant with SEC broker/dealer laws with your capital partners?  

39. What is your track record on producing K-1s each tax year at a reasonable time?

40. How do you determine the total insurable value? 

41. Full value or loss limit?

42. Do you purchase a Directors and Officers (D&O) liability insurance policy and an Errors and Omissions (E&O) policy?

The last section deals with the team and their experience. You want to know if their operation is vertically integrated or do they, instead, outsource parts of their operation. If they are vertically integrated, what is the experience of each key team member? It is really not that difficult to acquire property, especially if the sponsor has loose underwriting criteria and access to capital from a track record built during the “everything upswing” in the market. Where the rubber meets the road to separate truly exceptional sponsors from average or poor ones is to delve into the property and asset management!



43. What is your contingency plan if one of the partners falls ill or passes away?

44. What is your role on the team and who else is involved as a GP?

45. Who is the asset manager and what is their experience?

46. Who are your most crucial team members? 

47. Is your property management in-house or outsourced? 

48. If outsourced, how do you manage your PM? 

49. Have you worked with the PM on past acquisitions?

50. Who are the active operating GPs and what is their experience/track record?

Now you have a framework to reference when you’re evaluating sponsors and/or deals.

The more sponsors you speak with, the more naturally these questions will flow from one to another. You’ll be able to quickly determine if a relationship is worth pursuing. A relationship. That’s exactly what you should be considering when you’re evaluating an illiquid investment that could take 5-7 years, or longer, to exit. As with anything, experience leads to improved confidence. Happy hunting for that next great deal!

Paul Shannon is a fund manager of InvestWise Collective, a customizable fund aimed at helping investors diversify out of traditional markets into passive real estate opportunities. He is also an active real estate investor, acquiring over 200 residential units, many deep value-add properties, starting with single-family and transitioning to multifamily, by recycling his equity and/or joint venturing. He has experience in underwriting, acquisitions, raising capital, property management, project management, and is a licensed Realtor. Paul is also an experienced limited partner, investing in over 1,500 multifamily units across the country. In addition to multifamily, Paul has invested as an LP in NNN, industrial, sale leasebacks, preferred equity, 1st and 2nd position notes, ATMs, mixed-use development and private equity.

This article is for educational purposes only and is not to be relied upon as the basis for entering into any transaction or advisory relationship or making any investment decision. All investments involve the risk of loss, including the loss of principal. Past performance, and any performance results reflected in this article, is not an indication of future results.

Chris Franckhauser

Vice President of Strategy & Growth, Advisory Partner

Chris Franckhauser, Vice President of Strategy & Growth, Advisory Partner for Left Field Investors, has been involved in real estate since 2008. He started with one single-family fix and flip, and he was hooked. He then scaled, completing five more over a brief period. While he enjoyed the journey and the financial tailwinds that came with each completed project, being an active investor with a W2 at the time, became too much to manage with a young and growing family. Seeing this was not easily scalable or sustainable long term, he searched for alternative ideas on where to invest. He explored other passive income streams but kept coming back to his two passions; real estate and time with his family. He discovered syndications after reconnecting with a former colleague and LFI Founder. He joined Left Field Investors in 2023 and has quickly immersed himself into the community and as a key member of our team.  

Chris earned a B.S. from The Ohio State University. After years in healthcare technology and medical devices, from startups to Fortune 15 companies, Chris shifted his efforts to consulting and owning a small apparel business when he is not working with LFI (Left Field Investors) or on his personal passive investments. A few years ago, Chris and his family left the cold life in Ohio for lake life in the Carolinas. Chris lives in Tega Cay, South Carolina with his wife and two kids. In his free time, he enjoys exploring all the things the Carolinas offer, from the beaches to the mountains and everywhere in between, volunteering at the school, coaching his kids’ sports teams and cheering on the Buckeyes from afar.  

Chris knows investing is a team sport. Being a strategic thinker and analytical by nature, the ability to collaborate with like-minded individuals in the Left Field Community and other communities is invaluable.  

Jim Pfeifer

President, Chief Executive Officer, Founder

Jim Pfeifer is one of the founders of Left Field Investors and the host of the Passive Investing from Left Field podcast. Left Field Investors is a group dedicated to educating and assisting like-minded investors negotiate the nuances of the passive investing landscape and world of syndications. Jim is a former financial advisor who became frustrated with the one-path-fits-all approach of the standard financial services industry. Jim now concentrates on investing in real assets that produce cash flow and is committed to sharing his knowledge with others who are interested in learning a different way to grow wealth.

Jim not only advises and helps people get started in passive real estate syndications, he also invests alongside them in small groups to allow for diversification among multiple investments and syndication sponsors. Jim believes the most important factor in a successful syndication is finding a sponsor that he knows, likes and trusts.

He has invested in over 100 passive syndications including apartments, mobile homes, self-storage, private lending and notes, ATM’s, commercial and industrial triple net leases, assisted living facilities and international coffee farms and cacao producers. Jim is constantly looking for new investment ideas that match his philosophy of real assets producing cash flow as well as looking for new sponsors with whom he can build quality, long-term relationships. Jim earned a degree in Finance & Marketing from the University of Oregon and a Master’s in Business Education from The Ohio State University. He has worked as a reinsurance underwriter, high school finance teacher, financial advisor and now works exclusively as a full-time passive investor. Jim lives in Dublin, Ohio with his wife, three kids and two dogs. In his free time, he loves to ski, play Ultimate frisbee and cheer on the Buckeyes.

Jim earned a degree in Finance & Marketing from the University of Oregon and a Master’s in Business Education from The Ohio State University. He has worked as a reinsurance underwriter, high school finance teacher, financial advisor and now works exclusively as a full-time passive investor. Jim lives in Dublin, Ohio with his wife, three kids and two dogs. In his free time, he loves to ski, play Ultimate frisbee and cheer on the Buckeyes.

Chad Ackerman

Chief Operating Officer, Founder

Chad is the Founder & Chief Operating Officer of Left Field Investors and the host of the LFI Spotlight podcast. Chad was in banking most of his career with a focus on data analytics, but in March of 2023 he left his W2 to become LFI’s second full time employee.

Chad always had a passion for real estate, so his analytics skills translated well into the deal analyzer side of the business. Through his training, education and networking Chad was able to align his passive investing to compliment his involvement with LFI while allowing him to grow his wealth and take steps towards financial freedom. He has appreciated the help he’s received from others along his journey which is why he is excited to host the LFI Spotlight podcast and share the experience of other investors and industry experts to assist those that are looking for education for their own journey.

Chad has a Bachelor’s Degree in Business with a Minor in Real Estate from the University of Cincinnati. He is working to educate his two teenagers in the passive investing world. In his spare time he likes to golf, kayak, and check out the local brewery scene.

Ryan Steig

Chief Financial Officer, Founder

Ryan Stieg started down the path of passive investing like many of us did, after he picked up a little purple book called Rich Dad, Poor Dad. The problem was that he did that in college and didn’t take action to start investing passively until many years later when that itch to invest passively crept back up.

Ryan became an accidental landlord after moving from Phoenix back to Montana in 2007, a rental he kept until 2016 when he started investing more intentionally. Since 2016, Ryan has focused (or should we say lack thereof) on all different kinds of investing, always returning to real estate and business as his mainstay. Ryan has a small portfolio of one-to-three-unit rentals across four different markets in the US. He has also invested in over fifty real estate syndication investments individually or with an investment group or tribe. Working to diversify in multiple asset classes, Ryan invests in multi-family, note funds, NNN industrial, retail, office, self-storage, online businesses, start-ups, and several other asset classes that further cement his self-diagnosis of “shiny object syndrome”.

However, with all of those reaches over the years, Ryan still believes in the long-term success and tenets of passive, cash-flow-focused investing with proven syndicators and shared knowledge in investing.

When he’s not working with LFI or on his personal passive investments, he recently opened a new Club Pilates franchise studio after an insurance career. Outside of that, he can be found with his wife watching whatever sport one of their two boys is involved in during that particular season.

Steve Suh

Chief Content Officer, Founder

Steve Suh, one of the founders of Left Field Investors and its Chief Content Officer, has been involved with real estate and alternative assets since 2005. Like many, he saw his net worth plummet during the two major stock market crashes in the early 2000s. Since then, he vowed to find other ways to invest his money. Reading Rich Dad, Poor Dad gave Steve the impetus to learn about real estate investing. He first became a landlord after purchasing his office condo. He then invested passively as a limited partner in oil and gas drilling syndications but quickly learned the importance of scrutinizing sponsors when he stopped getting returns after only a few months. Steve came back to real estate by buying a few small residential rentals. Seeing that this was not easily scalable, he searched for alternative ideas. After listening to hundreds of podcasts and attending numerous real estate investing meetings, he determined that passively investing in real estate syndications was the best avenue to get great, risk-adjusted returns. He has invested in dozens of syndications involving apartment buildings, self-storage facilities, resort properties, ATMs, Bitcoin mining funds, car washes, a coffee farm, and even a Broadway show.

When Steve is not vetting commercial real estate syndications in the evenings, he is stomping out eye diseases and improving vision during the day as an ophthalmologist. He enjoys playing in his tennis and pickleball leagues and rooting for his Buckeyes and Steelers football teams. In the past several years, he took up running and has completed three full marathons, including the New York City Marathon. He is always on a quest to find great pizza, BBQ brisket, and bourbon. He enjoys traveling with his wife and their three adult kids. They usually go on a medical mission trip once a year to southern Mexico to provide eye surgeries and glasses to the residents. Steve has enjoyed being a part of Left Field Investors to help others learn about the merits of passive, real asset investments.

Sean Donnelly

Chief Culture Officer, Founder

Sean holds a W2 job in the finance sector and began his real estate investing journey shortly after earning his MBA. Unfortunately, it could not have begun at a worse time … anyone remember 2007 … but even the recession provided worthy lessons. Sean stayed in the game continuing to find his place, progressing from flipping to owning single and multi-family rentals to now funding opportunities through syndications. While Sean is still heavily invested in the equities market and holds a small portfolio of rentals, he strongly believes passive investing is the best way to offset the cyclical nature of traditional investment vehicles as well as avoid the headaches of direct property ownership. Through consistent cash flow, long term yield and available tax benefits, the diversification offered with passive investing brings a welcomed balance to an otherwise turbulent investing scheme. What Sean likes most about the syndication space is that the investment opportunities are not “one size fits all” and the community of investors genuinely want to help.

He earned a B.S. in Finance from Iowa State University in 1995 and a MBA from Otterbein University in 2007. Sean has lived in eight states but has called Ohio home for the last 20+.  When not attending his children’s various school/sporting events, Sean can be found running, golfing, shooting or fly-fishing.

Patrick Wills

Chief Information Officer, Advisory Partner

An active real estate investor since 2017, Patrick Wills’ investing journey began like many others – after reading the “purple book” by Robert Kiyosaki. Patrick started with single family rentals, and while they performed well, he quickly realized their inability to scale efficiently while remaining passive. He discovered syndications via podcasts and local meetups and never looked back. He joined Left Field Investors in 2022 as a member and has quickly become an integral part of the team as Vice President of Technology.

An I.T. Systems Engineer by trade, he experienced the limitations of traditional Wall Street investing firsthand in his career and knew there had to be a better way to truly have financial freedom.

Unfortunately, that better way is inaccessible to those who need it most. His mission is to make alternative investments accessible to everyone who seeks to take control of their financial future and to pursue their passions in life.

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