First Time Being A Real Estate Sponsor? Gain Investor Respect With These Pointers
Sometimes, purchasing expensive commercial properties can't be done alone. When you act as a real estate sponsor, you contribute some of the purchase price and enlist investors to contribute until your group has enough capital to make the purchase. As a sponsor, over time you'll get more of a return than the other investors. However, you'll also be responsible for much of the daily work too, including the task of keeping investors invested in the properties that you're buying and holding. To keep them happy and encourage their respect, try these pointers.
Make Things Easy
Once you've delivered a report about specific properties and why you think they're good investment choices, make it easy for investors to keep saying yes to you. Send online forms they can sign, set up ACH deposits and withdrawals and deliver their tax forms in a timely way.
Tell the Truth
If there are some flaws with a property you'd still like to invest in, share those flaws with your investors. Don't let them find out after a sale goes through; give them time to ask questions and make their own decisions about whether to proceed.
Give Periodic Reports
After investors have agreed to go in on a property with you, don't disappear. Keep them up to date with financial reports that detail how much income the property is bringing in and how much of that income will go to them. If tenants move in or out, ensure that investors have that information to. Changes and updates should be shared too.
To build a community feeling among yourself and those who are investing in properties together, hold various events throughout the year. They can be short meet-and-greets, or they can be fully fleshed out seminars or dinners where business is discussed. Meeting in person should make everyone feel positive about their new partners and can provide a chance for people to work on even more deals together in the future, whether they're related to commercial property investments or not.
Each day, make time specifically for interacting with your investors. If they email or call, be quick in responding. The more available you can be to them, the more confident they will be about your role as a sponsor.
Real estate sponsoring can enable you and investors to profit on commercial real estate properties. Keep communication open and your partnership should continue many years.