Markussen Willumsen posted an update 2 months ago
Before raising money for your first deal, we thought the reason accredited investors would passively spend money on our deal can be because of the return. However, as there are other syndication and investment avenues which an investor can be, offering solid returns can’t be the driving factor. So, if returns aren’t their primary motivation, what exactly is? We have narrowed down the passive investors’ three primary reasons for investing in a rental syndication:
1. My cash is in good hands
2. I will be updated on relevant information about the offer
3. To obtain the vehicle hassle-free
Need #1 – Is my take advantage good hands?
The main focus when managing other people’s money needs to be capital preservation. As with any investment, you can find never guarantees – not for returns or perhaps the preservation of capital. So, I have to are aware that you are proactively mitigating any major risks by the following these investing principles:
1. Don’t upgrade on appreciation
2. Don’t over leverage
3. Don’t get instructed to sell
I also need to trust you as a person. I have to have a very good feeling about yourself and honestly think you have my favorite interests in mind. This trust is made by the length and quality of our relationship by you demonstrating your expertise via your experience, your team maybe thought leadership. With this trust, I’ll be certain that you’ll have sound judgment, make good decisions, conservatively underwrite the offer, perform all the homework before purchasing a flat at a nominal amount, fulfill the projected returns you outlined. Finally, I would like to understand that you’re a responsive communicator. If you find a problem with the offer, I wish for you not only to notify me in the issue, but use a proposed solution at the same time. And if I get in touch with you having a question or concern, I expect that very same lightning quick response by having an answer.
Need #2 – Am i going to find status updates about the deal?
Additionally, I wish to be provided ongoing status updates from the project. On a consistent basis, I would like a director level – not just a CEO or entry-level employee level – update around the take care of supporting data. To accomplish this, the syndicator needs to provide their investors which has a monthly email update which includes the next information:
1. Distribution details
2. Occupancy and pre-leased occupancy rates
3. Actual rents vs. projected rents
4. Capital expenditure updates with images 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 task hassle-free?
Finally, I need a hassle-free process. The reason why I am a passive investor is because I must park my profit a smart investment and not have to worry about doing some of the day-to-day operations. I’d like a boring investment with practically no surprises. All I would like to do is look at monthly email updates and receive my distributions. So, to effectively provide investor distributions, start a direct deposit, instead of sending checks in the mail. Basically do connect which has a concern, I would like a fast resolution with minimal forward and backward. Therefore, you must proactively address potential concerns inside your monthly updates and if an angel investor includes a concern, possess a solution set up before replying.
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