Red Flags in a Real Estate Sponsor and How to Spot Them w/ Brian Burke

Real estate sponsor decisions can make or break your entire investment. A good sponsor can navigate a bad situation. A bad sponsor can blow up a perfectly good deal.

This episode is co-hosted by Ben Gray, partner and CEO at RSN Property Group. We’re joined by Brian Burke, founder and CEO of Praxis Capital and author of “The Hands-Off Investor”. 

With more than 30 years of experience, Brian has operated through multiple market cycles and acquired over a billion dollars in real estate. He’s seen the run-ups, the corrections, and exactly what happens when deals are built on shaky foundations.

In this conversation, he shares what actually matters when evaluating a real estate sponsor in today’s environment.

We break down the key things you need to look for when evaluating a sponsor and how to avoid the costly mistakes that many investors make. We talk about the right questions to ask, the sponsor’s track record you should focus on, and why a sponsor’s debt strategy and capital stack can shape the entire outcome of a deal.

If you’re investing passively or thinking about it, this episode will give you a checklist to confidently vet a real estate sponsor and protect your capital.

Let’s dive in! 

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Key Takeaways: 

  • 00:00 Intro 
  • 01:56 Chase sponsors, not deals 
  • 03:40 Market trends and making sense of demographics 
  • 08:02 How to properly vet a sponsor
  • 09:51 The harsh truth about ROI
  • 12:07 Sponsor due diligence and red flags 
  • 14:04 Three crucial questions to ask a sponsor 
  • 15:30 Fees, waterfalls, and underwriting 
  • 28:44 Debt and maturity dates 
  • 31:20 Advice for aspiring investors 
  • 32:24 Outro

Additional resources: 

➡️ Check out Brian Burke:

➡️ Visit https://reedgoossens.com/ and:

  • Invest passively in multifamily real estate 
  • Get FREE access to my 100% Passive Real Estate Investment Masterclass
  • Take a look at my portfolio
  • Get FREE multifamily real estate resources 

➡️ Follow me on social media:

➡️ Subscribe to my podcast: 

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