What it is
Use this checklist when you review any private real estate fund. A single item isn’t necessarily disqualifying, but each deserves a clear answer in writing.
How it works
- Returns described as guaranteed, or a “pref” presented as a fixed yield.
- No LPA or PPM, just a deck and a wire request.
- Wiring instructions arriving by email, or changed by email.
- Fees on committed capital with no step-down, plus undisclosed affiliate fees.
- Deal-by-deal carry without a secured clawback.
- No GP capital at risk.
- No key-person or removal provisions.
- Affiliate transactions the GP can approve itself.
- No audited or reviewed financials, or annual-only reporting.
- Unlimited term extensions and no transfer exceptions.
- 506(c) offering that doesn’t verify accreditation.
- Pressure to commit before you or your attorney can review.
- Sponsor or principals subject to “bad actor” events (check FINRA BrokerCheck and SEC actions).
Good for LPs vs. watch out for
✓ Good for LPs
- Answers in writing, tied to specific LPA sections
- Independent verification of track record
- Your own attorney and CPA review
⚠ Watch out for
- Answers that are only verbal
- Reluctance to share documents before commitment
- Unclear who holds the money
How Story Samurai Investments handles it
Here is how our template answers the checklist: 8% pref described as a priority, not a guarantee (Risk Factors #1); full document set; wiring verified by phone, never by email; fee on invested capital with a step-down; clawback with escrowed carry; a GP commitment of [PLACEHOLDER]; key person and for-cause removal; LP consent for affiliate deals; reporting per LPA Art. 8 ([PLACEHOLDER] audited/reviewed); accreditation verified before acceptance. Open items still marked [PLACEHOLDER] are noted in the related articles.
Based on our template documents (TEMPLATE, DRAFT FOR ATTORNEY REVIEW, NOT FOR USE). The final Limited Partnership Agreement controls.
Where to find it in the documents
- LPA Art. 3–9
- PPM §2, §6, §7
- Risk Factors (all)