Due Diligence Focused

We bring institutional due diligence to the retail accredited investor.

Through industry partnerships, we’ve engaged multiple due diligence companies and credit analysts to do a thorough review of each opportunity we consider. This allows us to fact-check every assumption and variable in the underwriting model, enabling us to fully understand the risks and opportunities in the deal’s business model. The result of this work is to bring only the best offerings to Carlton Lane investors.

Our mission is simple: to empower accredited investors with the same level of transparency, discipline, and verification that the largest family offices and institutions demand—so you can invest in private real estate with clarity and confidence. At Carlton Lane, it’s the standard we apply to every offering we present.

Due diligence is the foundation of any successful investment.

At Carlton Lane, due diligence isn’t a step in the process—it’s the foundation of everything we do.

Most accredited investors lack the time, tools, or specialized expertise to conduct a comprehensive, institutional-level review of private real estate investments. Even those who understand underwriting rarely have access to the data required to validate assumptions. As a result, many investors make decisions based on sponsor reputation, surface-level metrics, or a referral source—without an independent way to verify what they’re being told.

According to industry sources, less than 25% of financial advisors consider themselves knowledgeable about alternative investments. Furthermore, advisors have limited access to only approved firm products, per FINRA rules. As such, their knowledge base is limited to the firm's approved product suite.

This is why we invest heavily in independent, data-driven due diligence to ensure every assumption and risk is fully vetted and understood to better educate our investors on each opportunity.

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Carlton Lane difference

As registered securities professionals, we have access to BD and RIA solutions on the market and can conduct our own diligence on them to determine additional product availability where suitable.

Our Due Diligence Framework

Our process is designed to mirror the standards of institutional investors and family offices. Carlton Lane’s methodology focuses on three core components:

1. The Deal

2. The Sponsor

3. The Legal Documents

The deal

We begin by dissecting every assumption in the underwriting model. Each input must withstand independent verification—whether it’s operating expenses, financing terms, or future valuation assumptions.

Key areas of analysis include:

Insurance: Are premium estimates in line with local market data and projected growth rates?
Tax Estimates: How do the developer’s assumptions compare with actual assessment rates, mill rates, and construction phase taxation?
Debt Structure: What are the true terms—fixed or floating? Are rate caps or swaps in place, and for how long? How do LTC/LTV, DSCR, and covenants compare to market norms?
Expense Assumptions: Are construction, operating, and maintenance costs benchmarked to trusted data? Are growth rates realistic?
Exit Cap Rate: Is the projected exit cap supported by current sales comps and market trends, or merely optimized for IRR targets?
NOI Growth: How does the sponsor plan to grow NOI—through rent increases, expense control, or both? Are those assumptions credible?
Reserves: Are capital reserves sufficient to protect against contingencies?
Timeline: Is the proposed schedule achievable based on prior performance and market conditions?

We then perform sensitivity analyses to identify breakeven thresholds and evaluate how much stress the project can withstand while remaining profitable.

The Sponsor

We go far beyond reviewing past projects: A sponsor’s experience and integrity can make or break a deal.

Do they invest personally—and with real cash, or future fees?
How transparent are their financials? Do they have the appropriate financial controls? Do they provide audited statements?
What is their payment history with vendors?
Who are their key partners—civil engineers, GCs, property managers—and what are their reputations?

What systems support their investor relations and reporting?
Are there affiliated-party transactions, and are the terms equitable?
Do they carry key-man, E&O, and cyber insurance coverage?
How robust is their organizational structure and disaster-recovery planning?

We also conduct independent background checks on all key executives (using LexisNexis or an equivalent service) to confirm their professional and personal credibility.

The Legal Documents

The final pillar of our process focuses on structure and alignment. We scrutinize every word of the PPM, Operating Agreement, and LP Agreement to understand the true risk/reward profile for investors.

Our review covers:

The hierarchy of share or unit classes and the investor’s actual priority in distributions.
Sponsor-friendly clauses that may limit investor rights or increase risk.
Loan covenants such as DSCR and Debt Yield ratios for feasibility and potential friction points.
Verification of all third-party documents—including loan documents, title reports, appraisals, leases, environmental studies, and market analyses.

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Institutional-quality due diligence shouldn’t be reserved for billion-dollar funds. At Carlton Lane, it’s the standard we apply to every offering we present.