Being a property syndicator, I figured the most important thing that would make accredited investors wish to passively invest and partner with your firm was the return. But I soon realized that wasn’t the greatest concern.
My experience has given me the opportunity to better understand passive investors. And in today’s blog, I am discussing these major reasons I’ve seen to be why investors invest passively in your apartment syndication.
1. Knowing their is at safe hands
2. As a portion of a process that is certainly trouble-free
3. Consistent updates on important info about the deal
Knowing their cash is safe hands…
As with every other investments, there won’t be any profit or capital preservation guarantees in the real estate investment business. Therefore, passive investors need to know that we are taking all preventive steps to reduce risks. We accomplish that in-part by sticking with the following three fundamental principles of apartment investing. (i) We secure long term debt (ii) We don’t buy for appreciation only for cashflow (iii) We make sure there is adequate cash reserves. Overall, investors would like to know their money is safe. His or her syndicator, we imply to them this by being excellent communicators, minimizing associated investment risks, keeping the necessary industry experience and constructing a good meaningful relationship.
Like a part of a procedure that’s trouble-free…
Every passive investor uses a trouble-free process. They want to be a passive investor since they wanted to take 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, so that they have little time and energy to spare.
After undertaking initial homework about the deal before investing, investors want a smart investment that won’t give them sleepless nights. It really is for that reason the sole work we want our investors to accomplish is check their monthly email about the deal and receive their cashflow and profits.
Consistent updates on important information about the deal…
What our investors want is what we feature, a specific, plain english, to-the-point, no fluff investment update with real numbers, solutions (if there’s an issue) and real-time property info & data. To be sure our investor receive 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 expense 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, we offer investors with the current rent roll and the profit and loss statement so that they can evaluate the operations in the property and thoroughly look into the details whenever they wish to. Our passive investors get distributions monthly (not quarterly or yearly) so that they not just receive updates but in addition receive payment.
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