As being a property syndicator, I figured the biggest thing that could make accredited investors desire to passively invest and partner with our firm was the return. On the other hand soon realized that wasn’t the most important concern.
My experience has provided me the opportunity to better understand passive investors. As well as in today’s blog, We are talking about these main reasons I’ve discovered to be why investors invest passively in our apartment syndication.
1. Knowing their money is within safe hands
2. Being a part of a process which is trouble-free
3. Consistent updates on information in regards to the deal
Knowing their money is at safe hands…
As with all other investments, there aren’t any profit or capital preservation guarantees from the investment business. Therefore, passive investors would like to know that we’re taking all preventive steps to minimize risks. We accomplish that in-part by staying with the subsequent three fundamental principles of apartment investing. (i) We secure long term debt (ii) We don’t purchase for appreciation limited to cashflow (iii) We make certain there’s adequate cash reserves. Overall, investors want to know the money is safe. His or her syndicator, we show them this since they can be excellent communicators, minimizing associated investment risks, having the necessary industry experience and constructing a good meaningful relationship.
As being a section of an operation which is trouble-free…
Every passive investor uses a trouble-free process. They want to become a passive investor because they planned to placed their money in a profit-yielding investment without having to bother themselves about daily operations. Most savvy passive investors are busy along with other money-making businesses, in order that they have little time to spare.
After undertaking initial research around the deal before investing, investors want a smart investment that won’t provide them with insomnia. It’s for that reason the sole work we’d like our investors to perform is check their monthly email about the deal and receive their cashflow and profits.
Consistent updates on important info about the deal…
What our investors want ‘s what we stock, a definite, clear language, to-the-point, no fluff investment update with real numbers, solutions (if there’s a worry) and live property info & data. To be sure our investor obtain the absolute best communication every month our deal updates include but are not tied to:
Any community engagement events
Any issues and our proposed solutions
Actual rents versus projected rents
Rehab and cost updates with pictures of the progress made
Distribution details
Actual rental premium versus expected rental premium
Relevant market and/or submarket updates
Then, every four months, our company offers investors using the current rent roll and the profit and loss statement to be able to review the operations from the property and punctiliously investigate the details whenever they need to. Our passive investors get distributions on a monthly basis (not quarterly or yearly) so they really not only receive updates but in addition receive payment.
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