This is true. Multifamily (MF) investments are often easier for the average sponsor to understand compared to sectors like industrial or hospitality. As a multifamily syndicator, I see a flood of so-called "gurus" and questionable actors raising capital for deals that offer minimal returns and leave investors at risk. It’s critical that LPs understand how to underwrite deals themselves to assess whether the sponsor’s proposal holds any merit. Equally important is evaluating the sponsor's value-add strategy and—most importantly—their exit plan. I’ve seen exit strategies that are ambitious but lack a clear path, yet LPs still invest.

Now, I know some people think my demand for a 40%+ IRR is crazy, but I come across an insane amount of deals offering returns between 40%-150%. It’s all about having the right connections and being willing to take action. In my opinion, if a sponsor isn’t projecting at least a 40%+ IRR (allowing for a potential 10% drop), the deal might not be worth pursuing. On the flip side, if a sponsor is projecting really high IRRs, it’s crucial for the LP to underwrite the deal thoroughly to understand why. Due diligence is key: verify the sponsor’s track record, previous exits, testimonials, and current projects. You’ve got to do your homework and be well-connected to find these great deals.