As a property syndicator, I thought what is important that will make accredited investors wish to passively invest and partner with your firm was the return. However i soon remarked that wasn’t the most important concern.
My experience has given me the ability to better understand passive investors. As well as in today’s blog, I am discussing the three major causes I’ve discovered to be why investors invest passively in our apartment syndication.
1. Knowing their is safe hands
2. Being a part of a procedure that is trouble-free
3. Consistent updates on important info regarding the deal
Knowing their funds is at safe hands…
As with all other investments, there aren’t any profit or capital preservation guarantees within the real estate investment business. Therefore, passive investors would like to know that we’re taking all preventive measures to attenuate risks. We do this in-part by staying with the following three principles of apartment investing. (i) We secure long term debt (ii) We don’t purchase for appreciation only for cashflow (iii) We make certain there’s adequate cash reserves. Overall, investors would like to know that their financial resources are safe. As his or her syndicator, we suggest to them this by being excellent communicators, minimizing associated investment risks, getting the necessary industry experience and developing a good meaningful relationship.
As being a part of a procedure which is trouble-free…
Every passive investor wants a trouble-free process. They desire to turned into a passive investor because they planned to place their cash in a profit-yielding investment without needing to bother themselves about daily operations. Most savvy passive investors are busy along with other money-making business ventures, in order that they have little time for you to spare.
After undertaking initial homework for the deal before investing, investors want a great investment that won’t allow them to have sleepless nights. It can be for this reason the only real work we’d like our investors to perform is check their monthly email for the deal and receive their cashflow and profits.
Consistent updates on important info in regards to the deal…
What our investors want is the thing that we supply, an obvious, plain english, to-the-point, no fluff investment update with real numbers, solutions (if there’s a worry) and real-time property info & data. To make certain our investor obtain the absolute best communication on a monthly basis our deal updates include but are not limited by:
Any community engagement events
Any issues and our proposed solutions
Actual rents versus projected rents
Rehab and cost updates with images of the progress made
Distribution details
Actual rental premium versus expected rental premium
Relevant market and/or submarket updates
Then, every 4 months, you can expect investors using the current rent roll along with the profit and loss statement in order to look at the operations with the property and punctiliously look into the details should they want to. Our passive investors get distributions each month (not quarterly or yearly) so they not just receive updates but also receive payment.
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