Sponsor removal needs 75% and the manager is the sponsor's own company

Your 4 is the one I'd hold the line on, and I'd put it above 1.

A promote paid on refinance proceeds without a lookback at final liquidation means the sponsor can be paid on paper gains that never become real gains. The fix is standard and negotiated all the time in institutional deals: either the promote on interim distributions is escrowed until liquidation, or there's an express clawback with a personal or entity guarantee behind it. An unsecured clawback obligation from a single-purpose LLC with no assets after the deal winds up is decoration.

Ask them directly whether the promote on a refi is subject to a final true-up, and get the answer in the document rather than in an email. If the answer is no, price that into what 1.8x means to you.

On 2, the markup on capex is the line I'd query. 4% of collections is inside the normal band for that unit count and half a month on new leases is common. A 10% construction management markup on top of a general contractor's own fee is where affiliate arrangements get expensive, because the sponsor decides both the scope and the fee on the scope. Ask what the total affiliate compensation is projected to be across the hold, as a dollar figure. Sponsors rarely volunteer that sum and it is usually larger than people expect.

Whether any of this is enforceable the way it reads depends on the state the LLC is organized in and how a court would treat the fiduciary waiver language, and that's a securities lawyer question, not mine.

The reinvestment clause is the one that would stop me. I'm in this for income and eventually getting my money back, and clause 3 says the sponsor can decide my five-year deal is a seven-year deal without asking. That's not a fee issue, that's my timeline belonging to somebody else.

Also, and say if this is out of line, you're closing on your first rental in five weeks. Doing both with the same money sounds like how people end up short at the wrong moment.

@marlow said the thing I was going to. @wren the clause reading is good and I'd steal your list, but the decision in front of you isn't really about clause 4. You've got one pile of cash and two homes for it, and the rental is the one you'll learn from and can actually sell if you need to.

I've been planning my first purchase for eleven months and the syndication offers keep arriving because they always arrive. There'll be another one after the rental closes and you'll read the documents better next time.