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Before raising money for your first deal, we thought the reason accredited investors would passively invest in our deal would be due to the return. However, since there are other syndication and investment avenues that a venture capitalist may go, offering solid returns is not the driving factor. So, if returns aren’t their primary motivation, what exactly is? We’ve refined the passive investors’ three primary reasons for investing in a condo syndication:

1. My funds are in good hands

2. We are updated on relevant information about the offer

3. To obtain the vehicle hassle-free

Need #1 – Is my cash in good hands?

The attention when managing other people’s money ought to be capital preservation. Like every investment, there are never guarantees – not for returns or preservation of capital. So, I need to know that you might 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

Furthermore, i must trust you like a person. I must have a good feeling in regards to you and truly believe that you’ve my favorite interests planned. This trust is made with the length superiority our relationship through you demonstrating your expertise by your experience, your team maybe thought leadership. With this trust, We are certain if you should have common sense, make good decisions, conservatively underwrite the sale, perform all the required research before purchasing a rental and at the absolute minimum, meet the projected returns you outlined. Finally, I wish to are aware that you are a responsive communicator. If there is a problem with the deal, I want you to not only notify me with the issue, but use a proposed solution at the same time. Of course, if I contact you having a question or concern, I expect that same lightning quick response having an answer.

Need #2 – Should i be provided with status updates around the deal?

Additionally, I want to find ongoing status updates with the project. On a consistent basis, I need a director level – not just a CEO or entry-level employee level – update about the deal with supporting data. To do this, the syndicator should provide their investors which has a monthly email update that includes these 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, plus your proposed solution

6. Any community engagement events

Need #3 – Is the task hassle-free?

Finally, I would like a hassle-free process. The reason why I’m a passive investor is because I would like to park my money in a good investment without having to concern yourself with doing some of the day-to-day operations. I’d like a boring investment with little to no surprises. All I must do is see the monthly email updates and receive my distributions. So, to effectively provide investor distributions, start a direct deposit, as opposed to sending checks in the mail. Basically do connect which has a concern, I need a fast resolution with minimal forwards and backwards. Therefore, you should proactively address potential concerns with your monthly updates and if a venture capitalist has a concern, possess a solution in position prior to replying.

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