Credibility. There are usually many critical components to an investment being successful - but having spent a lifetime building small private real estate investments, if I had to choose one predicator of success it would be the promotor’s credibility. A “winner” will avoid a venture that can’t be worked into a successful venture for all involved and has the skills/knowledge/tenacity to see the project through to success.
Incentives. The vast majority of investment offerings are “front loaded.” What that means is that the investors are paying “up front” for sales fees/commissions, costs of producing the investment and profits to the promotor. This has two major negative impacts for the investor; first the investment is starting off in the red and must make a certain amount of money for the investors to just break even and secondly, this gives the promotors of the investment incentives to sell shares in the investment to some degree irrespective of performance. Neither should be acceptable to an astute investor.
Structure. Due to certain USA securities regulations, most investments are packaged in a legal document laden with disclosures, waivers, and legal verbiage that obscures the essential elements of the investment. Each investment we do is documented in the simplest and most effective form and we provide our investors with 100% of critical information on one page, unobscured by legalese.
Opportunity. Every market fluctuates. The extremes of those fluctuations present amazing
opportunities. The lending institutions in the U.S.A. made mortgage funds artificially low and overly abundant during during the early 2000s. That forced real estate prices to excessive highs and ultimately resulted in hordes people owning real estate they could not afford. The defaults on those mortgages has caused a global economic disaster and with that, a correction in real estate prices to the other extreme resulting in prices that are a fraction of what they were.
Strategy. If you don't understand and respect the business strategy, you shouldn't be investing in the venture. The simpler the strategy the better.
Details. Your success lies in your ability to make many critical aspects of the investment operate exceptionally. Know what those critical components are. If the people who are administering your investments don't have major incentives to "nail the details" and if you don't have a method to audit and confirm that is the case, success will not be likely.
