| Project: | | Yes, No, or Number: | Comment: |
| #1 Is the property worth what I'm paying for it? |
| | Is the income used to determine the NOI actual or projected? | | |
| | Are the expenses used to determine the NOI actual or projected? | | |
| | What is the cap rate on the property? | | |
| | What is the cap rate in the market the property is in? | | |
| #2 Sponsor Underwriting |
| | Is sponsor in the TIC business full time? | | |
| | Years sponsor has been full time in the TIC business? | | |
| | Years sponsor has been full time in the real estate business? | | |
| | Is this sponsor's sole business? | | |
| | How many transactions has the sponsor done? | | |
| | What has been the (average)return to investors? | | |
| | How many investors have invested with this sponsor? | | |
| | How has the sponsor dealt with problems in the past? | | |
| #3 Due Diligence Team Underwriting |
| | Who does the property Due Diligence? | | |
| | How many years of full time experience do they have? | | |
| #4 Tenant Underwriting |
| | What is the net worth of the Tenants? | | |
| | How long have the tenants been in business? | | |
| #5 Management Underwriting |
| | Who is responsible for Property Management? | | |
| | Years of full time experience? | | |
| | What is the depth of the Management Team? | | |
| | Who does the Asset Management? | | |
| | Years of full time experience? | | |
| #6 Debt |
| | Is the loan non-recourse? | | |
| | Does the debt meet my 1031 requirements? | | |
| #7 Is the closing guaranteed? |
| | Does the sponsor own the property now? | | |
| | If not, what is my assurance it will close within my timeline? | | |
| | Is the permanent financing in place? | | |
| | How many of the offered properties meet my 1031 needs? | | |
| #8 Exit Issues |
| | Who decides when the building sells? | | |
| | Can I sell my interest? | | |
| | What is the process for selling just my interest? | | |
| #9 Other |
| | What are the front end costs and fees? | | |
| | Who gets the appreciation on the property? | | |
| #10 Legal and Tax |
| | Is a legal opinion letter available? If so, from what firm? | | |
| | Is a tax opinion letter available? If so, from what firm? | | |
| #11 Does the deal pass the 15 tests in Rev Proc |
| | 1) Tenancy in Common Ownership 2002-22? | | |
| | 2) Number of Co-Owners | | |
| | 3) No Treatment of Co-Owners as an Entity. | | |
| | 4) Co-Ownership Agreement | | |
| | 5) Voting | | |
| | 6) No Restrictions on Alienation | | |
| | 7) Sharing Proceeds and Liabilities upon Sale of Property | | |
| | 8) Proportional Sharing of Profits and Losses | | |
| | 9) Proportionate Sharing of Debt | | |
| | 10) Options | | |
| | 11) No business Activities | | |
| | 12) Management and Brokerage Agreements | | |
| | 13) Leasing Agreements | | |
| | 14) Loan Agreements | | |
| | 15) Payments to Sponsor | | |