Care For Your Investors Like Mom Cares For You
Who do you know that gives you unconditional love and attention? You guessed correctly – your mom! Remember those good old days when you were a little kid and you relied on your mom to take care of you? Your mom drove you to your school and activities every day, fed you, dressed you, and nursed you when you were sick. Remember how your mom comforted you after you skinned your knee? I am not forgetting to give kudos to your dad, and he definitely deserves a credit as well, but my point is that your mother offers the special type of love, attention and nurturing that is specific to a woman.
Let’s transform this type of love and attention to a syndicator dealing with her/his investors. If you are like me, we both believe that it is important to care for investors after the property is purchased and the deal is closed. Just like your mother always kept you fed and satisfied, it is just as important to nurture the syndicator-investor relationship and keep investors happy and satisfied following the birth of the investment!
Here are four important points for a syndicator to keep in mind when working with passive investors:
- Be on top of your game! If you promised your investors checks on a monthly, quarterly or annual basis; no matter what – stay on top of it and mail the checks! This point also applies to tax documents. If, for instance, you purchased a property via partnership, then make sure you file 1065 and send K-1’s on time to your investors (ahead of the April 15th deadline!) It is important so that they could also file their personal income taxes on time.
- Keep your investors informed and up to date. Let’s say that you promised investors to provide them quarterly updates and a couple of weeks after the last update, there was a major storm in the area where the property is located and major losses were incurred. Imagine that after the insurance payout, the partnership still has to lay out additional $50,000 to repair damages. Such major issues must be immediately communicated to your investors; do not wait until the next quarterly update. It is very critical to keep your equity partners abreast of any on-going events. Of course on the flip side, if something positive occurs, don’t be shy to toot your own horn.
- Spend time with each of your investors. Every quarter or so, make an effort to talk on the phone or meet with your investors on an individual basis. Ask them about their personal life if they care to share, and just have a normal conversation about life and family. Offer to send them additional educational articles or other materials.
- Stay true to your word. For example, if you promised your investors to sell the property within five years, make every effort to follow through on your word. Unless the market crashes and it makes no sense to sell it in five years, make every attempt to do so. Alternatively, use an alternate strategy such as cash out/refinance, and offer your investors a way out if they are inclined to do so by year five.
Bottom line, it's always important to take care of your investors. If they are happy, they will be your repeat customers and you will never have to worry about finding new ones as you will get people referred to you on a regular basis.