Ways to Build Credibility as a Real Estate Investing Syndicator
The passage of the JOBS Act in 2010 made property investing through syndication possible for investors of all economic levels. As one of the two major parties in a real estate syndicate, the sponsor (general partner) organizes and manages the investment project. The passive investors (limited partners) pool their financial resources as capital to fund the deal.
This important act enabled anyone to start investing in commercial real estate. Real estate syndicates offer a highly effective way to raise funds quickly and efficiently for large property investment projects. Real estate syndicate sponsors have successfully acquired impressive amounts of capital through the use of crowdfunding and other techniques.
Real estate investing is now quite competitive and has been during the past year. This competitive environment was created by unusually low interest rates. Another contributing factor has been the significantly limited availability of housing throughout the U.S. Although large multifamily properties offer potentially profitable investing opportunities through a syndicator, not all such property investing deals succeed.
Syndicates that do not increase credibility or make an effort to distinguish themselves in the industry are often ignored by active investors. Syndication companies that make use of advanced technology and syndicate software can enhance their overall operations and produce optimal results for investors.
Credibility building can be essential during the early development of the syndicate. This is because there is most likely very limited, if any, track record for interested investors to examine. Yet an increasing number of new, competitive property syndicators are discovering how to break into and succeed in this competitive area of the industry.
Relying on Previous Experiences
If you are introducing a new syndicate that has no track record, many investors will be uneasy about participating in your first property deals. They want to ensure that they are investing capital in a safe, well-managed property deal. By making potential investors aware of your background in real estate or finance, you can reassure them.
You can convince them that you are offering a safe, solid property deal with high profit potential. Even if you were not the sponsor (general partner) of earlier successful real estate deals, your participation will reassure them. Your past experience plus any relevant credentials that you may have can put your potential investors at ease.
Potential investors may ask you directly why they should trust your syndicate more than other competing syndicates and sponsors. By learning to leverage your former experiences, your knowledge and your expertise, you can attract and secure good investors.
Asset Specialization for Greater Credibility
Property specialization can help your syndicate stand out from your competitors. Although general syndicates tend to blend into a group, syndicates that develop and offer investments in diversified large properties often seem risky to invest with. They may lack expertise in any of these types of real estate investing.
It is best to specialize in a specific asset class as a property syndicator. For example, potential investors are much more likely to invest in a multifamily real estate investment deal than one that is promoted as a “residential” project. The more specific your investment category is, the more attractive it becomes to investors.
Strategic Alliances
By partnering with more experienced syndicators, new sponsors can gain lasting credibility. Once a credible, respected syndicate is established, these early alliances will have initiated long-lasting, valuable REI relationships. If you invest in syndication technology in the early stages of your syndicate’s development, your property deals can gain credibility rapidly.
Your investment projects will be better structured and managed. You will also have quality communications with potential investors. By using top-caliber real estate syndication software such as Syndication Pro, you will no longer need cumbersome spreadsheets. In their place, you will use easily accessible, convenient and actionable groups of data. Prospective investors favor this type of data presentation and are accustomed to reviewing it.
Although the multifamily real estate market is quite competitive, several syndicates may join together on a large property investment deal. This often enables small startup syndicates to gain strength and credibility. These strategic partnerships can also aid your syndicate in building an impressive track record and gaining new investors.
You can also leverage other valuable business relationships outside of the syndicates for the benefit of building strong credibility. These relationships may be with your accountant, attorney and other business professionals. Your syndicate and you as its sponsor can soon attain recognition and a stronger presence in the real estate syndication investing industry.
Information Promotion and Marketing
Publishing, promoting and marketing information concerning your real estate or financial background gives your syndicate more credibility. It also reinforces your stated REI expertise, making it more tangible and believable.
Whether you publish an e-book, a blog post, a newsletter or a prospectus, this digital media will advertise your brand. It will also reveal your true knowledge and understanding of the REI industry. Your new and empowering digital footprint will provide your brand with lasting visibility as well as increased credibility.
A Unique Sales Angle
Potential investors typically prefer investing with syndicators with an extensive track record over those with little experience. If your syndicate lacks extensive experience, you need to develop another strong sales angle or selling point. Try making slight revisions to your syndicate’s branding features, such as the logo, mission statement, website design and main keywords.
You can tweak these digital features to attract your target audience. By offering a highly appealing investing platform and justified rates of return on investments, you can make your syndicate prominent. Using a combination of excellent strategy consistency and perseverance, you can move your syndicate toward its ultimate goals.
Gaining Credibility as a Multifamily Property Syndicator
Once you have a well-established brand, asset class, method of information marketing and sales angle, your syndicate’s credibility foundation is created. You can then strengthen and expand this credibility by initiating the following three steps:
- Locate Your Growing Environment. Finding the best place in the real estate investing world for nurturing and developing your REI syndicate is essential for your success. There are many marketing platforms, social media sites and popular real estate-related websites for establishing valuable connections today. By using LinkedIn, Twitter and Facebook to promote and market your REI syndicate, you can enjoy greater levels of profitability and ongoing success.
LinkedIn is promoted and known as the social network for business. It is an ideal platform for posting industry-relevant content to attract interested investors. In your LinkedIn profile, you can include your syndicator asset class, rate of success and ultimate goal. This can enable you to attract both potential and seasoned real estate investors.
When using Twitter, you can join conversations related to your real estate investing niche. Many members of this social media site are mid-career business professionals who are interested in participating in multifamily property deals as passive investors. The Twitter platform enables you to re-tweet conversations and include your own input as well. This is a great opportunity for promoting your syndicator investing deals.
Facebook offers longevity and the greatest number of global users of any social media platform today. On Facebook, you have access to a worldwide audience with interest in myriad types of business, and real estate is no exception. You can attract a significant number of interested passive investors for your syndication property deals. You can also benefit from using precision targeting via Facebook ads to reach your ideal audience.
- Use Diversified Digital Content. The leaders in your REI investing niche constantly create and post content relative to multifamily property syndication investing. They may focus on blogs, newsletters, YouTube videos, social media posts, webinars or podcasts. By creating dynamic and engaging content in one format and then converting it into other formats, you can significantly strengthen and expand your brand’s visibility and credibility.
- Expand Your Target Audience. One great advantage of today’s digital environment is that it enables you to track who is reading, viewing or listening to your content. On the Twitter platform, you can follow and engage with anyone as you like. On both Facebook and Twitter, you can easily locate other users in your industry and niche.
How to Know that You Are Gaining Credibility
To determine whether your multifamily real estate investing syndicate is gaining credibility, look for specific signs. As your business visibility increases, you should acquire greater numbers of connections with influencers in your REI niche. You should also be attracting more followers. Interested passive investors should be contacting you to participate in a podcast or to write a blog.
If you like to create one type of content like videos or podcasts, you can hire other content creators to produce your content as audio tracks, blogs or webinars. When you convert the same content into different digital formats, this process is known as content compounding.
As you watch your syndicate gain greater degrees of visibility and credibility, you will be well on your way to becoming a trusted authority in the world of multifamily property investing as an REI syndicator.