The 3 Secrets to Attract and Keep Your Passive Apartment Investors
Before raising money for the first deal, we thought the reason accredited investors would passively purchase our deal would be due to return. However, because there are other syndication and investment avenues to which an angel investor can be, offering solid returns is not the driving factor. So, if returns aren’t their primary motivation, what's? We've got simplified the passive investors’ three primary reasons behind committing to a flat syndication:
1. My financial resources are in good hands
2. I am updated on relevant information on the sale
3. The operation is hassle-free
Need #1 - Is my take advantage good hands?
The main focus when managing other people’s money ought to be capital preservation. As with any investment, you'll find never guarantees - not for returns or the preservation of capital. So, I want to know that you happen to be proactively mitigating any major risks with the following these investing principles:
1. Don’t replace on appreciation
2. Don’t over leverage
3. Don’t get expected to sell
Also i should trust you like a person. I have to have a good feeling about yourself and truly believe that you've my best interests at heart. This trust created from the length and excellence of our relationship by you demonstrating your expertise via your experience, your team or perhaps your thought leadership. Using this type of trust, I am certain that you will have wise practice, make good decisions, conservatively underwrite the deal, perform all the required research before purchasing a condo possibly at a nominal amount, meet the projected returns you outlined. Finally, I would like to are aware that you might be a responsive communicator. If you have a problem with the offer, I would like you not only to notify me of the issue, but possess a proposed solution also. Of course, if I contact you using a question or concern, I expect that very same lightning quick response by having an answer.
Need #2 - Am i going to be provided with status updates around the deal?
Additionally, I must be provided with ongoing status updates with the project. On a consistent basis, I want a director level - not really a CEO or entry-level employee level - update for the cope with supporting data. To achieve this, the syndicator needs to provide their investors using a monthly email update that includes the following 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, as well as your proposed solution
6. Any community engagement events
Need #3 - Is the process hassle-free?
Finally, I want a hassle-free process. The reason why I am a passive investor happens because I want to park my profit a smart investment without having to be worried about doing any of the day-to-day operations. I'd like a dull investment with little to 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. If I do connect which has a concern, I need an instant resolution with minimal backwards and forwards. Therefore, you need to proactively address potential concerns with your monthly updates and when a venture capitalist features a concern, possess a solution in position before replying.
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