3. How to Evaluate the Sponsor, the Market & the Deal with Brian Burke

March 14, 2021

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This is an LFI episode and LFI is now part of PassivePockets.

Brian Burke is the President & CEO of Praxis Capital and the author of The Hands-Off Investor. He has been investing in real estate for 30 years and has been a multi-family syndicator for 19 years. Brian has purchased over $500 million in real estate and raised over $200 million from investors and has never lost a penny of investor capital. In this episode Brian talks about funds versus single asset investing, how to evaluate a sponsor and market and some red flags to look for when evaluating a deal.

Brian talks about why they have recently shifted to a fund model rather than a single asset syndication. He also discusses the importance of vetting the sponsor by asking them questions like, how long they have been a sponsor, how many deals have the invested in, how many exits they have had and how their past returns have compared to projections. He talks about the importance and challenges in trying to ascertain the content of the sponsor’s character. Brian recommends that you do your research including when you hear the sponsor on a podcast or at an event that you listen to what they are saying and determine if it makes sense.

Brian also talks about how he picks markets. He invests in markets that people are moving to and that have income growth and job growth which results in rent growth.

He also talks about some red flags to look for when evaluating multi-family syndications; including debt, default ratio and rent growth.

Podcast he recommends:
BiggerPockets

To connect with Brian go to www.praxcap.com and accredited investors can go to www.investwithpraxis.com. Brian can also be found on the BiggerPockets forum and on Instagram @investorbrianburke.

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