As being a real estate syndicator, I thought what is important that would make accredited investors wish to passively invest and partner with your firm was the return. However i soon seen that wasn’t the largest concern.
My experience has provided me the opportunity better understand passive investors. Plus today’s blog, I am talking about these main reasons I’ve discovered to be why investors invest passively inside our apartment syndication.
1. Knowing their money is safe hands
2. As a section of an operation that is certainly trouble-free
3. Consistent updates on information and facts regarding the deal
Knowing their money is at safe hands…
As with any other investments, there are no profit or capital preservation guarantees in the investment business. Therefore, passive investors wish to know that we’re taking all safety measures to minimize risks. We achieve this in-part by sticking with these 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 certain there exists adequate cash reserves. All in all, investors wish to know that their financial resources are safe. As their syndicator, we suggest to them this when you are excellent communicators, minimizing associated investment risks, having the necessary industry experience and developing a good meaningful relationship.
Being a a part of a procedure which is trouble-free…
Every passive investor uses a trouble-free process. They wish to turned into a passive investor because they wished to place their cash in a profit-yielding investment and never have to bother themselves about daily operations. Most savvy passive investors are busy along with other money-making small business ventures, so they really have little time to spare.
After undertaking initial research around the deal before investing, investors want an investment that won’t allow them to have difficulty sleeping. It’s for this reason the sole work we would like our investors to accomplish is check their monthly email about the deal and receive their cashflow and profits.
Consistent updates on information concerning the deal…
What our investors want is exactly what we supply, an obvious, plain english, to-the-point, no fluff investment update with real numbers, solutions (if there’s a concern) and real time property info & data. To make sure our investor receive the best communication every month 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 pictures of the progress made
Actual rental premium versus expected rental premium
Relevant market and/or submarket updates
Then, every four months, we provide investors together with the current rent roll and also the profit and loss statement in order to look at the operations from the property and punctiliously investigate the details when they wish to. Our passive investors get distributions every month (not quarterly or yearly) so they really not just receive updates and also receive payment.
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