What is Needed to Attract Passive Investors

[Don Konipol]

After raising over $400 million from private investors over the last 19 years, I am often asked what are the most important assets a syndicator need possess to successfully raise private capital. Here are my picks, in order of importance

1. A verifiable track record of success, especially in the type of deal being offered

2. An above average return with less risk than normal for that return

3. An attractive property visually and financially

4. A serious capital contribution by the sponsor

5. A recognized SEC compliant offering or formal exemption, includes professionally prepared PPM, Operating Agreement and Subscription Agreement, and Reg D form filed with SEC

6. Relevant document, such as MAI appraisal, title reports, surveys, historical financial statements, tax returns, projections, line item bids for any improvements to be made, as well as a clear, concise and relevant Investor Proposal Summary.

7. A road map to reach qualified, interested, potential investors

8. A portal investors can access for information and for making an investment

9. A quick response to investor inquires by a knowledgeable human being

10. A website presence that looks like it was created by a professional website designer and not from a template for a free or low cost service provider

A lot of it is already being successful, knowledgeable, and experienced, making it three times as tough to “break in”. More of a slowly build reputation, Capital, and deal experience. Reminds me of an old Yiddish proverb my Russian grandfather used to tell me

“With money in his pocket a man is smarter, funnier, and better looking too!”.