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Equity versus Debt

Debt funds are a solid, defensive alternative investment channel while hedging the risk through real estate collateral in the first lien, diversification, exposure to various markets and high internal control…

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  1. Everything Ori Gutman wrote, plus a good read of the operating agreement. What are the duties and rights of the developer and investors. You're probably talking about a group investment, so I would check what the group's rights are against the developer in case things do not work out properly and what remedies both parties have. What happens if you need to inject money into a project in a few years (repairs or improvement), is there a limit to how much the developer can demand from the investors, or can he take out another loan and under what conditions. Do investors have the ability to criticize these things.
    Make sure that if there is a dispute between the investors and the entrepreneur, they are litigating in the country! You do not want to have a legal hearing in the United States.
    Another important thing, check the real funding ratio. Sometimes a lot of marketing and selling costs are charged to the transaction, and then it is shown that the financing ratio is 75 percent of the transaction cost, but in practice the financing ratio versus the net asset is closer to 90 percent. Need to check these things carefully, down the road they can be very very critical.