Shaffer Foss posted an update 1 year, 2 months ago
Before raising money for our first deal, we thought the reason accredited investors would passively invest in our deal can be due to return. However, since there are other syndication and investment avenues to which an investor can be, offering solid returns can’t be the driving factor. So, if returns aren’t their primary motivation, what’s? We have reduced the passive investors’ three primary causes of investing in an apartment syndication:
1. My financial resources are in good hands
2. We are updated on relevant information on the offer
3. The operation is hassle-free
Need #1 – Is my profit good hands?
The main focus when managing other people’s money ought to be capital preservation. Like any investment, you will find never guarantees – not for returns or preservation of capital. So, I have to are aware that you happen to be proactively mitigating any major risks with the following these investing principles:
1. Don’t purchase for appreciation
2. Don’t over leverage
3. Don’t get made to sell
Also i should trust you as a person. I must have a great feeling with regards to you and honestly think which you have my favorite interests at heart. This trust is established from the length and excellence of our relationship and by you demonstrating your expertise via your experience, your team or maybe your thought leadership. With this trust, I’ll be certain if you’ll have good sense, make good decisions, conservatively underwrite the deal, perform all the required research before purchasing a rental and at a minimum, fulfill the projected returns you outlined. Finally, I wish to are aware that you are a responsive communicator. If there is a problem with the sale, I would like you not only to notify me in the issue, but have a very proposed solution too. And when I find you having a question or concern, I expect that very same lightning quick response having an answer.
Need #2 – Will I be provided with status updates about the deal?
Additionally, I want to find ongoing status updates from the project. Regularly, I need a director level – not only a CEO or entry-level employee level – update on the handle supporting data. To achieve this, the syndicator needs to provide their investors having a monthly email update that includes the subsequent information:
1. Distribution details
2. Occupancy and pre-leased occupancy rates
3. Actual rents vs. projected rents
4. Capital expenditure updates with photos of the progress
5. Relevant market and/or submarket updates
5. Any issues, together with your proposed solution
6. Any community engagement events
Need #3 – Is the method hassle-free?
Finally, I would like a hassle-free process. The reason I’m a passive investor is really because I would like to park my cash in a good investment while not having to concern yourself with doing any of the day-to-day operations. I would like an ordinary investment with virtually no surprises. All I would like to do is browse the monthly email updates and receive my distributions. So, to effectively provide investor distributions, generate a direct deposit, as opposed to sending checks within the mail. Basically do connect with a concern, I want a simple resolution with minimal backwards and forwards. Therefore, you should proactively address potential concerns inside your monthly updates if an investor includes a concern, have a solution available just before replying.
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