Markussen Hinson posted an update 3 months, 4 weeks ago
Before raising money for the first deal, we thought the main reason accredited investors would passively put money into our deal could be because of the return. However, as there are other syndication and investment avenues that an angel investor can go, offering solid returns is not the driving factor. So, if returns aren’t their primary motivation, what exactly is? We’ve narrowed down the passive investors’ three primary causes of purchasing a rental syndication:
1. My funds are in good hands
2. I will be updated on relevant information on the sale
3. The procedure is hassle-free
Need #1 – Is my take advantage good hands?
The main focus when managing other people’s money must be capital preservation. As with any investment, there are never guarantees – not for returns or perhaps the preservation of capital. So, I must realize that you happen to be proactively mitigating any major risks with the following these investing principles:
1. Don’t buy for appreciation
2. Don’t over leverage
3. Don’t get made to sell
Also i must trust you as a person. I have to have a great feeling in regards to you and truly believe that you have my best interests at heart. This trust is made with the length and excellence of our relationship through you demonstrating your expertise via your experience, your team or your thought leadership. With this particular trust, I’ll be certain if you should have good sense, make good decisions, conservatively underwrite the sale, perform all the required homework before purchasing a rental at the very least, meet the projected returns you outlined. Finally, I must know that you’re a responsive communicator. If you have a problem with the sale, I want you to not only notify me from the issue, but use a proposed solution also. And if I reach out to you with a question or concern, I expect that very same lightning quick response with an answer.
Need #2 – Will I be provided with status updates about the deal?
Additionally, I would like to discover ongoing status updates of the project. On a regular basis, I need a director level – not really a CEO or entry-level employee level – update around the take care of supporting data. To do this, the syndicator needs to provide their investors having a monthly email update that also 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, plus your proposed solution
6. Any community engagement events
Need #3 – Is the process hassle-free?
Finally, I would like a hassle-free process. The key reason why I’m a passive investor is really because I wish to park my profit a smart investment while not having to worry about doing any of the day-to-day operations. I want a dull investment with hardly any surprises. All I want to do is see the monthly email updates and receive my distributions. So, to effectively provide investor distributions, start a direct deposit, rather than sending checks within the mail. Only do reach out having a concern, I’d like an instant resolution with minimal back and forth. Therefore, you must proactively address potential concerns inside your monthly updates if an investor includes a concern, possess a solution in position prior to replying.
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