Being a real estate syndicator, I believed the main thing that might make accredited investors wish to passively invest and partner with this firm was the return. But I soon pointed out that wasn’t the most important concern.
My experience has given me the opportunity better understand passive investors. Along with today’s blog, I will be discussing the main reasons I’ve seen to be why investors invest passively inside our apartment syndication.
1. Knowing their money is in safe hands
2. As a portion of a procedure which is trouble-free
3. Consistent updates on information in regards to the deal
Knowing their is safe hands…
As with all other investments, there are no profit or capital preservation guarantees within the investment business. Therefore, passive investors wish to know that we’re taking all safety measures to reduce risks. We achieve this in-part by adhering to these three basics of apartment investing. (i) We secure lasting debt (ii) We don’t replace on appreciation simply for cashflow (iii) We be sure there’s adequate cash reserves. All in all, investors would like to know that the funds are safe. As their syndicator, we suggest to them this by being excellent communicators, minimizing associated investment risks, having the necessary industry experience and developing a good meaningful relationship.
Like a part of a process that is certainly trouble-free…
Every passive investor uses a trouble-free process. They wish to turn into a passive investor given that they wished to place their take advantage a profit-yielding investment without having to bother themselves about daily operations. Most savvy passive investors are busy to money-making small business ventures, so they really have little time for it to spare.
After undertaking initial homework about the deal before investing, investors want a good investment that won’t give them sleepless nights. It really is on that basis the one work we would like our investors to complete is check their monthly email around the deal and receive their cashflow and profits.
Consistent updates on information and facts concerning the deal…
What our investors want ‘s what we feature, a specific, plain english, to-the-point, no fluff investment update with real numbers, solutions (if there’s a problem) and real time property info & data. To make certain our investor obtain the best communication each 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 value updates with pictures of the progress made
Distribution details
Actual rental premium versus expected rental premium
Relevant market and/or submarket updates
Then, every 4 months, we provide investors together with the current rent roll and the profit and loss statement so that they can review the operations with the property and punctiliously investigate details when they need to. Our passive investors get distributions on a monthly basis (not quarterly or yearly) so they really not merely receive updates but in addition receive payment.
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