Before raising money for first deal, we thought the primary reason accredited investors would passively purchase our deal will be as a result of return. However, with there being other syndication and investment avenues that an angel investor may go, offering solid returns can't be the driving factor. So, if returns aren’t their primary motivation, what is? We've narrowed down the passive investors’ three primary reasons for purchasing a condo syndication:
1. My money is in good hands
2. We are updated on relevant facts about the deal
3. To obtain the vehicle hassle-free
Need #1 - Is my profit good hands?
The main focus when managing other people’s money must be capital preservation. Like all investment, you will find never guarantees - not for returns or perhaps the preservation of capital. So, I must understand that you're proactively mitigating any major risks by the following these investing principles:
1. Don’t buy for appreciation
2. Don’t over leverage
3. Don’t get forced to sell
Also i must trust you like a person. I want to have a good feeling about you and truly believe which you have my favorite interests at heart. This trust is established from the length and excellence of our relationship through you demonstrating your expertise via your experience, your team or perhaps your thought leadership. With this particular trust, We are confident that you'll have wise practice, make good decisions, conservatively underwrite the sale, perform all the required required research before purchasing a condo at a nominal amount, satisfy the projected returns you outlined. Finally, I want to are aware that you're responsive communicator. When there is a problem with the deal, I wish for you not only to notify me from the issue, but possess a proposed solution at the same time. If I find you which has a question or concern, I expect that same lightning quick response having an answer.
Need #2 - Can i be provided with status updates on the deal?
Additionally, I wish to be provided with ongoing status updates in the project. On a regular basis, I want a director level - not really a CEO or entry-level employee level - update about the cope with supporting data. To do this, the syndicator must provide their investors using a monthly email update that features the following information:
1. Distribution details
2. Occupancy and pre-leased occupancy rates
3. Actual rents vs. projected rents
4. Capital expenditure updates with pictures of the progress
5. Relevant market and/or submarket updates
5. Any issues, as well as your proposed solution
6. Any community engagement events
Need #3 - Is the method hassle-free?
Finally, I would like a hassle-free process. The main reason I am a passive investor is really because I wish to park my cash in an investment without having to worry about doing one of the day-to-day operations. I'd like a dull investment with hardly any surprises. All I would like to do is look at monthly email updates and receive my distributions. So, to effectively provide investor distributions, set up a direct deposit, in contrast to sending checks in the mail. Only do touch base having a concern, I want an instant resolution with minimal forward and backward. Therefore, you must proactively address potential concerns with your monthly updates and if a venture capitalist features a concern, have a solution in place before replying.
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The 3 Secrets to Attract and Keep Your Passive Apartment Investors
Wednesday, January 29 2020.
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