Where do your investors fit in to your hierarchy of real estate priorities? Are you relieved they decided to invest, ecstatic that they helped you and your team close, or do you hold the belief that they should be grateful they got into your deal?
Sure, they are getting a great deal and you’re as trustworthy as they come. But who really wants to send in their hard-earned cash to a sponsor who doesn’t respect their investment decision. Why would I want to invest with you if you start off with the attitude that I should be grateful for having made it into your deal. Doesn’t matter how great the deal is, if your sponsor has a bad attitude when you invest, it’s not going to get better during all the years your investment sits with them.
Our investors always sit at the pinnacle of priorities. We respect them when they decide our deal isn’t the right fit, and we respect them when we make operational decisions. Like do we have enough funds to make a distribution. Should we refi or sell. Should we tell them about a serious crime on the property.
And how do we express our gratitude or their trust? By communicating, proactively informing them about events, progress, and setbacks, and by being available. You have too many investors and don’t want to take their calls? Then you shouldn’t be sponsoring real estate investments. We’re always available.
We also give back by helping our investors who want to do their own deals. A lot of our investors do. How much help did each of us get when we were starting out? An enormous amount. One investor had me over to his house to talk, others have been on the phone with me for way too long. And they had nothing to sell me. Just a generous heart, and maybe the people they help out progress to the point of finding good deals or becoming qualified partners.
There’s nothing like a strong commitment to a group of trusting investors to keep your head focused on what’s good for them, every day. When your attitude shifts and you stray from that commitment, your partners, managers, vendors, and everyone who you depend on to make this investment a success will see the change and the operational performance of the property will suffer.