Like a real estate property syndicator, I figured the biggest thing that might make accredited investors need to passively invest and partner with your firm was the return. However i soon pointed out that wasn’t the greatest concern.
My experience has given me the ability to better understand passive investors. And in today’s blog, I am referring to the significant reasons I’ve found to be why investors invest passively within our apartment syndication.
1. Knowing their cash is safe hands
2. As a section of an activity that is trouble-free
3. Consistent updates on important information about the deal
Knowing their is safe hands…
Just like any other investments, there won’t be 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 lower risks. We accomplish that in-part by sticking with the next three basics of apartment investing. (i) We secure long lasting debt (ii) We don’t buy for appreciation simply for cashflow (iii) We be sure there is certainly adequate cash reserves. All in all, investors want to know that the cash is safe. As his or her syndicator, we suggest to them this since they can be excellent communicators, minimizing associated investment risks, keeping the necessary industry experience and developing a good meaningful relationship.
Being a section of a process that is trouble-free…
Every passive investor uses a trouble-free process. They want to become a passive investor because they wished to take their money in a profit-yielding investment and never have 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 research about the deal before investing, investors want a good investment that won’t let them have difficulty sleeping. It can be for that 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 information in regards to the deal…
What our investors want ‘s what we feature, a definite, plain english, to-the-point, no fluff investment update with real numbers, solutions (if there’s a worry) and realtime property info & data. To make sure our investor have the absolute best communication on a monthly basis our deal updates include but aren’t tied to:
Any community engagement events
Any issues and our proposed solutions
Actual rents versus projected rents
Rehab and price updates with images 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 with all the current rent roll as well as the profit and loss statement to be able to evaluate the operations from the property and punctiliously look into the details when they need to. Our passive investors get distributions every month (not quarterly or yearly) so they not only receive updates but also receive payment.
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