As being a property syndicator, I was thinking the main thing that could make accredited investors desire to passively invest and partner with your firm was the return. However soon seen that wasn’t the biggest concern.
My experience has provided me the ability to better understand passive investors. And in today’s blog, I am discussing the 3 major causes I’ve found to be why investors invest passively within our apartment syndication.
1. Knowing their money is at safe hands
2. Being a portion of a process that is certainly trouble-free
3. Consistent updates on important info in regards to the deal
Knowing their is within safe hands…
Just like any other investments, there won’t be any profit or capital preservation guarantees in the real estate investment business. Therefore, passive investors want to know that we’re taking all preventive measures to minimize risks. We achieve this in-part by adhering to the subsequent three fundamental principles of apartment investing. (i) We secure long lasting debt (ii) We don’t purchase for appreciation simply for cashflow (iii) We be sure there is adequate cash reserves. Overall, investors want to know their money is safe. For their syndicator, we demonstrate to them this when you are excellent communicators, minimizing associated investment risks, keeping the necessary industry experience and developing a good meaningful relationship.
As a a part of an activity that’s trouble-free…
Every passive investor uses a trouble-free process. They wish to be a passive investor because they planned to put their cash 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, so that they haven’t much time to spare.
After undertaking initial research around the deal before investing, investors want a great investment that won’t give them sleeplessness. It is on that basis the one work we want our investors to accomplish is check their monthly email on the deal and receive their cashflow and profits.
Consistent updates on information and facts about the deal…
What our investors want is the thing that we feature, a clear, plain english, to-the-point, no fluff investment update with real numbers, solutions (if there’s a problem) and realtime property info & data. To be sure our investor receive the finest communication every month our deal updates include but aren’t limited by:
Any community engagement events
Any issues and our proposed solutions
Actual rents versus projected rents
Rehab and price 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, you can expect investors with the current rent roll along with the profit and loss statement to be able to evaluate the operations from the property and thoroughly investigate the details when they want to. Our passive investors get distributions every month (not quarterly or yearly) so they really not only receive updates but in addition receive payment.
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