Sponsor Due Diligence Checklist and Best Practices Guide

Key Takeaways A sponsor due diligence checklist is a checklist of checks to evaluate a potential sponsor’s finances, track record, and compliance. It includes financial statements, legal history, ownership, insurance, and conflict of interest checks. Good checklists establish dates, designate reviewers, and add risk scores to each item. Transparent documentation and established thresholds accelerate decision […]

Cap Rate vs. Interest Rate Spread What Investors Need to Know

Key Takeaways Cap rate vs interest rate spread compares a property’s net income yield to the gap between borrowing costs and investment returns. Cap rate indicates anticipated return on property value derived from net operating income. Interest rate spread measures the margin between loan rates and yields related to the asset. Both direct buy, hold, […]

IRR vs Equity Multiple: Explained with Calculation, Cash Flow Consistency, and Tax Considerations

Key Takeaways Match your metric to your strategy and psychology — choose IRR if your goals are time-sensitive or efficiency-oriented, and equity multiple for insight into total cash returned and capital preservation. IRR vs equity multiple explained: IRR is the annual rate of return that shows how fast an investment grows. Equity multiple shows total […]

LLC vs LP: How to Choose the Best Structure for Investors and Fund Management

Key Takeaways LLC vs LP for investors relates to the two most common business vehicles to hold investments. LLC provides limited liability to all members and flexible management and tax options. An LP has general partners that run the fund and limited partners that primarily invest and receive passive liability protection. Selecting between LLC or […]

Yield on Cost vs Cash-on-Cash Return: Definitions, Calculations, and When to Use Each

Key Takeaways Cash on cash vs yield on cost contrasts two methods for evaluating real estate returns. Cash on cash shows annual pre-tax cash income divided by actual cash invested. Yield on cost demonstrates annual net operating income divided by total project cost. Both assist investors in evaluating projects at different phases and with different […]

Schedule K-1 Tax Surprises: What to Know and How to Handle Them

Key Takeaways A k-1 tax surprise is unplanned income or taxes from k-1 that impact your tax bill. These forms report a partner’s or investor’s share of profits, losses, credits and deductions from partnerships, S corporations and trusts. Some of the common surprises are late k-1s, passive loss limits and state filing. The sections below […]

Asset Protection Trusts: Basics, Types, and How to Set One Up

Key Takeaways Asset protection trusts basics describe how a trust can protect assets against creditors while still maintaining control for the settlor. These trusts differ by jurisdiction, domestic and foreign, introducing limitations of time, exceptions, and expense. Common uses are protecting business assets, rental properties, and investments from lawsuits and bankruptcy. Fundamentals include trust type, […]