Welcome to Building Passive Income with CREI Collin

The sponsor is more important than the deal. In this episode, CREI Collin walks you through the exact due diligence framework to evaluate sponsors before you invest. Learn the 5 pillars of sponsor evaluation, the red flags to watch for, and the questions you MUST ask before writing a check.

What You'll Learn:

• Michael's cautionary tale: How skipping due diligence cost him $100K
• The 5 Pillars of Sponsor Due Diligence (Track Record, Team, Structure, Communication, Reputation)
• The critical questions to ask about track record and completed exits
• How to evaluate a sponsor's team and operations
• Deal structure red flags: fees, profit splits, and alignment of interests
• How to conduct reference checks (and what questions to ask)
• 8 red flags that should make you walk away immediately

Important Timestamps:

• [0:00] Introduction: Why the sponsor matters more than the deal
• [1:30] Michael's Story: The $100K lesson in skipped due diligence
• [3:45] The 5 Pillars of Sponsor Due Diligence Overview
• [4:30] Pillar #1: Track Record and Experience
• [5:00] Question 1: How many deals have you completed?
• [6:00] Question 2: How many deals have you successfully exited?
• [7:00] Question 3: What were the ACTUAL returns vs. projections?
• [8:15] Question 4: Have you been through a down market?
• [9:30] Question 5: Do you have experience in THIS asset class and market?
• [10:30] Pillar #2: Team and Operations
• [11:00] Who is on your team? (Acquisitions, Asset Management, IR, Finance)
• [12:15] Full-time vs. side hustle sponsors
• [13:00] How many deals are you managing at once?
• [14:00] Property management relationships
• [15:00] Pillar #3: Deal Structure and Alignment of Interests
• [15:30] Skin in the game: Minimum 5% co-investment required
• [16:30] Fee structure breakdown (Acquisition, Asset Management, Disposition)
• [17:45] Profit split and preferred return standards (70/30, 6-8% pref)
• [19:00] Pillar #4: Communication and Transparency
• [19:30] How often do you communicate? (Monthly/Quarterly updates required)
• [20:30] What happens when things go wrong?
• [21:30] Can I see examples of past investor updates?
• [22:00] Pillar #5: Reputation and References
• [22:30] How to ask for and call investor references
• [23:30] Questions to ask references
• [24:45] Do your own online research (Google, BBB, SEC filings)
• [25:30] Trust your gut
• [26:00] 8 Red Flags That Should Make You Walk Away
• [28:30] How to Organize Your Due Diligence (Checklist, Scorecard, Database)

Key Takeaways:

✅ The sponsor is MORE IMPORTANT than the deal—never skip due diligence

✅ Require minimum 5 completed deals with successful exits

✅ Demand 5%+ sponsor co-investment for alignment

✅ Call 3-5 investor references—don't skip this step!

✅ Red flags: No track record, lack of transparency, no skin in the game, poor communication

Resources Mentioned:

• Free Passive Investor Coaching Program: passiveinvestorcoaching.com
• CREI Partners: CREIPartners.com
• Email: invest@CREIPartners.com

#PassiveIncome #RealEstateInvesting #DueDiligence #SponsorVetting #Syndication #WealthBuilding #FinancialFreedom #PassiveInvestor #CommercialRealEstate #InvestmentStrategy

Ready to Vet Your Next Sponso...

Chapters

• (00:00:01) - Building Passive Income
• (00:01:23) - Building Passive Income: Conducting Due Diligence on Sponsors
• (00:02:14) - Sponsor Due Diligence
• (00:03:44) - Sponsors: Qualifications, Experience and Fees
• (00:10:45) - Pillar 4: Reputation and References
• (00:12:03) - Do Your Due Diligence On Sponsors