Everything I Ask Before I Ever Consider Writing a Check

CHAPTER ONE

Why Due Diligence Matters

The philosophy that has protected investor principal across 100+ acquisitions and five funds

"The due diligence process will confirm the value you identify in a deal or reveal issues. It is one of the keys to removing emotion from the decision-making process."

— Jeremiah Boucher, The Real Estate Edge Playbook (forthcoming)

Most investors lose money not because they picked the wrong asset class, timed the market poorly, or backed the wrong thesis. They lose money because they skipped the work that separates conviction from hope.

Due diligence is the crucial process of confirming the current financials on a potential property and avoiding "gotchas" that could cost you your margin after the sale. It includes paying for engineering reports, environmental reports, and title research to confirm there are no liens, liabilities, or infrastructural problems that haven't already been revealed.

For passive investors, understanding this process is just as important. Thorough due diligence is a hallmark of a competent and trustworthy sponsor. If active partners make discoveries during due diligence that lead to renegotiations — or even deal terminations — it means they're doing their jobs.

"Due diligence is largely about confirming the value you see and making sure there won't be any value-destroying surprises. It's your chance to make sure the deal can work."

📖

You're getting an exclusive early look at Play #12 from Jeremiah's forthcoming book, The Real Estate Edge Playbook — before it hits shelves. This is his full 12-item DD checklist, refined over 17+ years and more than $500M in transaction volume. The complete book contains both Active and Passive investor versions of every play, and much more.

CHAPTER TWO

The 6-Point Jockey Test

How to evaluate a sponsor's track record, alignment, and operating capability — before the pitch deck even opens

"Markets change, economies shift, interest rates rise, pandemics hit. You can't control all that. So the only thing you're really investing in is... the person."

Jeremiah developed the 6-Point Jockey Test over two decades of evaluating operators, partners, and deal sponsors. The core insight is simple: you're not just betting on the horse — the deal, the asset, the market. You're betting on the jockey — the person riding it. Most investors focus all their energy on the deal mechanics and barely interrogate the operator. That's backwards.

Before any spreadsheet, before any pitch deck, before any pro forma — ask these six questions. The answers will tell you more about whether you'll get your money back than any IRR projection ever could.

Clarity of Mission

"What does your company do?"

Can they explain it clearly? Is there real revenue? If they can't distill what they do into language a smart teenager could understand, that's a problem. You want a crisp, focused answer — not a wandering tour of every opportunity they've ever thought about.

GREEN: Clear thesis, proven revenue model

Skin in the Game

"How much skin in the game do you have?"

Cash, time, energy, family money — what do they personally lose if this fails? Sponsors who put meaningful GP capital alongside LP dollars are telling you they believe in the deal with their own net worth, not just their reputation. At Patriot, our General Partners commit seven-figure capital alongside our investors.

RED: Zero personal capital at risk

Focus

"What else are you working on?"

This is a focus check. If they have five companies, five side projects, and a personal brand that gets more attention than the portfolio — they're not an operator, they're a promoter. "If they have five companies, I'm out." You want someone who wakes up every morning obsessed with the thing your money is going into.

RED: Spread across too many ventures

Battle Scars

"Tell me about a failure and what you learned."

"No failure? No investment." Every serious operator has been through the fire. What matters isn't that they failed — it's what they extracted from it and how they built systems to prevent it from happening again. An operator who claims a perfect track record is either lying or hasn't been tested yet.

GREEN: Honest about losses, clear about lessons

Team Depth

"Who is on your team and why?"

"No talent? No investment." One person can't source, underwrite, close, construct, manage, market, report, and raise capital. You want to see a real organizational chart with real specialization. At Patriot, our 80+ member team spans acquisitions, construction, finance, operations, marketing, and investor relations — each discipline under one roof.

RED: One-person show with outsourced everything

Commitment Level

"Are they willing to risk everything?"

"They should be ready to die on this horse." This is the conviction check. The best operators aren't building a lifestyle business — they're building a legacy. They've staked their professional reputation, their personal capital, and their career trajectory on the outcomes they're asking you to fund.

GREEN: All in — reputation, capital, career

"The most important underlying question behind all six points is simple: Do I trust this person? No matter how exciting the opportunity is, we all have to do something we hate — give up control. That's why the jockey matters more than the horse."

— Jeremiah Boucher, Genius Network Talk, 2025

🎥

Watch Jeremiah deliver the full 6-Point Jockey Test at Genius Network:

Jeremiah Boucher — Genius Network, March 2025

CHAPTER THREE

Red, Yellow & Green Flags

The specific signals that separate operators who protect capital from those who destroy it

Green Flags

Significant GP co-investment alongside LPs — real capital at risk

Transparent communication of DD findings, including bad news

Vertically integrated operations — acquisitions through management under one roof

Track record of killing deals when DD reveals issues — discipline over deal flow

Conservative underwriting with stress-tested assumptions, not best-case pro formas

Clear explanation of past failures and the systems built to prevent them

Comprehensive third-party reports (Phase 1, PCR, ALTA, title) commissioned on every deal

No investor capital calls beyond original commitments — zero in 17+ years at Patriot

Yellow Flags

No third-party audits — may be appropriate at smaller fund size, but ask why

DD period less than 30 days — rushed diligence rarely ends well

Pro forma projections that don't distinguish from actual current performance

Sponsor's background is primarily in capital raising, not operations

No clear answer on what happens if the deal falls through — who eats the DD costs?

Leverage positions above 75% LTV without explicit justification

Vague descriptions of past performance — "high single-digit returns" or "low-teens" without specifics

Red Flags

No GP co-investment — if they won't bet on themselves, why should you?

Claimed "perfect track record" with zero losses — they're lying or untested

Pressure to commit before DD is complete or reviewed

Unwillingness to share bank statements, tax returns, or actual financials

No escape clause in the PSA tied to DD findings and EMD release

Downward trend in income paired with optimistic projections

Sponsor can't clearly articulate what their company does in plain language

Seller's attorney holds the escrow deposit instead of a neutral third party

CHAPTER FOUR

The 12-Item DD Checklist

Jeremiah's complete due diligence checklist — from document request to cash flow verification

"Before all else, you must follow the money trail. You must see the cash flow, the income, and the revenue. If you're buying an investment property, you must see the actual income hitting the bank account."

— Play #12, The Real Estate Edge Playbook (forthcoming)

Document Checklist

Request old surveys, bank statements, tax returns, and all relevant property records from the seller immediately upon PSA signing.

Current Financials

Two-year history of bank statements, P&L statements, and tax returns. NOI must be verified — if it's incorrect, nothing works as expected.

Phase 1 Environmental Report

Identifies environmental risks or contamination on the property. Non-negotiable for any commercial acquisition.

Phase 2 Environmental Report

If Phase 1 identifies potential concerns, Phase 2 involves physical testing — soil samples, groundwater, etc.

Property Condition Report

Details the current state of the property: structural, mechanical, electrical, plumbing — and what capital expenditures are needed.

ALTA Survey + Table A

Detailed property map showing boundaries, easements, and encroachments. Match it against the title policy — always.

ALTA Title Insurance

Ensures clear ownership and identifies any liens or encumbrances. Your attorney should review every exception.

License or Permit to Operate

Confirm all necessary licenses and permits are current and that the property complies with local, state, and federal regulations.

Property Inspectors

Contractors, well water inspectors, pavers, appraisers — engage specialists for the specific asset type you're acquiring.

Find Issues at the Source

Do your own on-site inspection. Drive by and walk the site. Take pictures. Talk to tenants — they know more than the seller will tell you.

Look at the Leases

Verify actual rents paid against the rent roll. Confirm state law allows rent increases. Leases are integral to value-add plays involving rent growth.

Look at Cash Flow

Recalculate current cash flow based on actual numbers — not the seller's pro forma. Consult your tax advisor for additional red flags.

"Pay attention to how the property is truly operating — the real expenses, the real income, and the real capital improvements needed. It's very important that you understand the difference between your pro forma and what's actually happening."

CHAPTER FIVE

The 8-Category Expense Verification

Every dollar you miss here is a dollar that comes directly out of your margin

The value in any deal lies in the numbers behind it — and you'll only fully understand those numbers through the due diligence process. Verify the six core expenses via vendor contracts, and cross-reference every line item against bank statements and tax returns.

Category	What to Verify
Income	Two-year history of bank statements, P&L statements, and tax returns. NOI must be verified — if it's incorrect, nothing works as expected. Follow the money trail: see the actual income hitting the bank account.
Expenses	Verify all six core expenses (taxes, insurance, management, maintenance, utilities, admin) via vendor contracts. Cross-reference against bank statements to catch what the seller's P&L might omit.
Taxes	Can be reassessed dramatically after purchase. Have a tax consultant estimate post-purchase taxes before you close — this is one of the most commonly overlooked costs in value-add acquisitions.
Insurance	Get your own quote — don't rely on the seller's rate. Watch specifically for flood zones, which can increase premiums substantially. Confirm full replacement cost casualty coverage.
Management	Determine the true cost of on-site vs. third-party management. If you're self-managing, still model the expense. If you're using a property management company, get competing bids.
Maintenance	Look for repair bills in the general ledger or bank statements — this one is tricky. Sellers routinely understate maintenance costs. Deferred maintenance that surfaces post-close erodes your returns.
Utilities	Verify water, sewer, gas, power, and trash costs to know the total expense load. Determine what's sub-metered to tenants vs. paid by the property. Utility costs in older assets can be significantly higher.
Administration	Check advertising costs, admin support, CPA, attorney, bookkeeper, and state filing fees. Should typically be under $10,000/year for smaller assets. Watch for line items that disappear after sale.

CHAPTER SIX

War Stories: Lessons That Cost Real Money

The expensive mistakes that built the systems Patriot uses today

Every operator who tells you they've never lost money is either lying or hasn't been in the game long enough. The question isn't whether you've taken hits — it's whether you built something from them. Here are two of the most expensive lessons that shaped how Patriot approaches diligence today.

$40K+

Total Loss

The EMD That Walked Away

"Know your dates, especially your DD expiration date. If you let your DD deadline pass, you will lose the deposit. In one instance, I lost over $40,000 in third-party reports and engineering fees, plus the deposit, because I didn't have FEMA insurance lined up for closing."

The deal was solid. The numbers worked. But a FEMA insurance requirement wasn't flagged early enough in the DD timeline, and by the time it surfaced, the deadline had passed. The seller kept the earnest money deposit, and every dollar spent on third-party reports was gone.

✦ LESSON: Track every DD deadline religiously. Get a written extension from the seller if necessary — emphasis on written.

$500K

Value Destroyed

The Gas Lines Under the Manufactured Homes

"Always get an ALTA survey and match it up with the ALTA title policy so you know where all property lines and easements, encroachments, and entitlements are physically located. I've been bitten by this."

At a manufactured housing community in Columbus, Ohio, Jeremiah's team discovered gas lines running underneath the homes — an easement that wasn't flagged in the initial documentation. The discovery reduced the property's value by over $500,000 and fundamentally changed the business plan for that asset.

✦ LESSON: Always cross-reference the ALTA survey against the title policy. Know the physical location of every easement.

"As an active investor, understanding the due diligence process and how to use the information you receive can make the difference between a great investment and a mistake that will set you back. Throughout this process, understanding the seller's story and their motivation is crucial."

CHAPTER SEVEN

The Structure Checklist

Fee structures, waterfall mechanics, and co-investment requirements that reveal true alignment

Deal structure tells you who the sponsor is actually working for. A well-aligned structure means the sponsor does best when you do best. A misaligned structure means they're collecting fees whether or not you ever see a return. Here's what to examine.

GP Co-Investment

"How much of your own capital are you putting into this deal alongside LPs?"

This is the single most important alignment question. If the GP is investing significant personal capital, they feel every gain and every loss alongside you. At Patriot, General Partners commit seven-figure capital alongside investors.

Preferred Return

"Is there a preferred return, and how does it accrue?"

A preferred return means LPs get paid first. Find out if it accrues from day one or after deployment. At Patriot Fund V, the 8% preferred return accrues from the day capital is accepted and is paid first from available cash flow.

Waterfall Structure

"What is the LP/GP split, and does it change at different return tiers?"

A common structure is 70/30 until a certain IRR hurdle, then 50/50 above it. This incentivizes the GP to outperform. Make sure you understand exactly when the split shifts and what triggers it.

Fee Structure

"What fees do you charge — acquisition, asset management, disposition, construction?"

Every fee reduces your return. Some fees are standard (1-2% asset management), others can be excessive. Ask what the all-in fee load is and whether any fees are subordinated to LP returns.

Capital Call Policy

"Have you ever issued a capital call beyond the original commitment?"

Unexpected capital calls mean the original underwriting was wrong — or reserves were insufficient. Patriot has never issued capital calls beyond original commitments in 17+ years of operations.

Exit Strategy & Timeline

"What is the target hold period, and what triggers an exit?"

Understand whether the fund exits based on value maximization or a fixed timeline. Capital that was actively recycled based on value realization — not static hold assumptions — is the sign of a disciplined operator.

CHAPTER EIGHT

The Questions Most LPs Never Ask

A practical question sheet designed for your next sponsor meeting

Most LP conversations stay surface-level: "What's the target IRR?" "What's the minimum?" "When do I get distributions?" The questions below go deeper — into the operational discipline, risk architecture, and alignment mechanics that actually determine whether your capital comes home. Take these to your next meeting.

On the Operator

How many deals have you analyzed vs. closed in the last 12 months? What's your LOI-to-close ratio?
Who leads the acquisition process, and can any single person push a deal forward alone?
What is the composition and decision-making process of your Investment Committee?
Tell me about a deal you walked away from after spending money on DD — and why.
How many full-time employees do you have, and what functions are in-house vs. outsourced?

On the Diligence Process

What third-party reports do you commission on every deal?
How long is your typical DD period, and have you ever closed a deal with less than 30 days of diligence?
Do your LOIs and PSAs include escape clauses tied to DD findings and EMD release?
How do you verify the actual income hitting the seller's bank account vs. the rent roll?
What happens to the DD costs if a deal falls through — does the fund absorb them?

On Risk Protection

What is your net leverage after improvements and closing costs, on a typical deal?
How do you determine reserves for each asset — what's the reserve methodology?
What insurance is in place at the property level and the corporate level?
Have you ever issued capital calls beyond the original commitment? If so, why?
How do you stress-test your underwriting — what assumptions change in your downside model?

On Alignment & Transparency

How much personal capital are you and the GP team investing alongside LPs?
Walk me through your waterfall — when does the GP/LP split change, and what triggers it?
What reporting do LPs receive, and how frequently? Can I see a sample quarterly report?
Has any investor ever lost principal in your funds? If so, what happened?
What is your LP retention rate from one fund to the next?

Everything I AskBefore I Ever ConsiderWriting a Check

Jeremiah Boucher

What You'll Learn

Why Due Diligence Matters

The 6-Point Jockey Test

Red, Yellow & Green Flags

The 12-Item DD Checklist

The Expense Verification Table

War Stories: Lessons That Cost Real Money

The Structure Checklist

The Questions Most LPs Never Ask

Why Due Diligence Matters

The 6-Point Jockey Test

Clarity of Mission

Skin in the Game

Focus

Battle Scars

Team Depth

Commitment Level

Red, Yellow & Green Flags

Green Flags

Yellow Flags

Red Flags

The 12-Item DD Checklist

Document Checklist

Current Financials

Phase 1 Environmental Report

Phase 2 Environmental Report

Property Condition Report

ALTA Survey + Table A

ALTA Title Insurance

License or Permit to Operate

Property Inspectors

Find Issues at the Source

Look at the Leases

Look at Cash Flow

The 8-Category Expense Verification

War Stories: Lessons That Cost Real Money

The EMD That Walked Away

The Gas Lines Under the Manufactured Homes

The Structure Checklist

GP Co-Investment

Preferred Return

Waterfall Structure

Fee Structure

Capital Call Policy

Exit Strategy & Timeline

The Questions Most LPs Never Ask

On the Operator

On the Diligence Process

On Risk Protection

On Alignment & Transparency

Ready to See How We Run Diligence?

Everything I Ask
Before I Ever Consider
Writing a Check