7 Things Passive Investors Should Look Out For

7 Things Passive Investors Should Look Out For | The Kitti Sisters

136: 7 Things Passive Investors Should Look Out For

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Today we would like to introduce you to our fictional financial friend.

Let’s call her Jane 👩🏻‍💼.

Like many of you, Jane is a busy working professional with personal goals and kids’ soccer ⚽ games to go to and bills to pay. But her goals include financial goals, specifically, how Jane can build her wealth in a way that allows her to achieve financial independence.

Jane’s friend told her about multifamily apartment syndications and she thinks it might be a good way to diversify her portfolio. But her family also taught her that good things come to those who hustle, so she’s understandably pretty skeptical about the idea of this thing called passive income.

Look, we’ve all heard horror 😱 stories about investments gone bad and Ponzi schemes where investors lose all their money, sometimes overnight. These can be bad deals, poor investments, or simply bad luck in the market. But no matter what the cause, Jane wants to protect her hard-earned assets, avoiding these financial pitfalls, and instead invest her money in a smart and safe way.

That sounds great, right, but is this easier said than done?

It depends on how you look at it.

Today we want to share with you the top seven things to consider when investing in multifamily apartment syndications so that you can set yourself and those you love up for financial success.  ⏬

✅ The first thing to consider when it comes to syndicators is their experience and track record 🧾.

Can they provide you with tangible examples of success?

Do they have the data and financial records to back up their statements?

Slow down, take your time ⏰, and do the appropriate research so that you can find a syndicator with experience and a good reputation in the industry with a portfolio to match.

Think of it like cyber stalking before a first date, but not in a creepy way.

✅ The second thing you need to look for and think about is the investment strategy and business objectives 💡.

You wouldn’t start a new business with a potential partner without developing a business plan, understanding their goals and objectives, and making a clear and detailed plan. 

Well, guess what?

The same holds true for investing.

You’ll want to find a syndicator with a clear and detailed (and transparent) investment plan that also has solid financial goals and risk tolerance. Everything should be out in the open and it should also align with your personal values and beliefs.

✅  The third thing that you’ll want to pay attention to is the syndicator’s due diligence process 🤓🤓.

Is it comprehensive?

Is it detailed?

Do they have thorough financial projections, market research, and full market analysis?

Along with the research, they should also have systems and processes in play to make their research and analysis streamlined and effective.

If not, you’ll want to pass and find someone who does.

✅  The fourth thing you want to look for is communication and transparency.

We mentioned transparency briefly above, but we can’t stress enough how important this is relational, for the business overall, and for your ultimate peace of mind.  🧐🧐

Look, it’s also not enough for a syndicator to just vocalize that this is important to them, either.

Go the extra mile and find out what their communication cadence looks like with investors, what their communication process is, and how often you can expect updates on your investment.

Never assume, this will get you in trouble every time.

✅  Fifth, we’ve gotta talk about 💰 money.

No, not just making money, which is obviously the ultimate end goal, but the fees and expenses associated with your investment.

We know, this isn’t fun or sexy, but it is SO essential that you understand exactly what your fees and expenses are going to be, both initially and in the long term. 

Make sure that you look for syndicators who are, again, transparent about their fees and expenses, what their fee structure is and how the investment performance might affect the fee structure in the future.

You definitely don’t want any surprises and you’ll want to make sure that you feel good about the fee structure, feel it is fair, and that you are aligned with the fee structure long term.

✅  Sixth, always plan for a way out.

We love ❤️ to be optimistic and hope for the best in all things, investments included, but the reality is that at some point, all good things must come to an end.

So be prepared, and have a well-defined exit strategy in mind for your investment that aligns with your investment objectives. 

Please know that this doesn’t mean you should jump ship at the first sign of trouble or when reality doesn’t match expectations. But know when it’s time to move on and make sure you understand the apartment snydicator’s plan for managing the investment throughout the entire lifecycle to ensure a successful exit.

✅  Last, but definitely not least, make sure your interests align!!

You wouldn’t plan a weekend getaway skydiving when you are deathly afraid of heights, and you shouldn’t be partnering with syndicators whose interests and goals don’t match yours.

This means, at a MINIMUM, that they have a personal level of investment in the property and that they should have a clear and transparent process for distributing profit to you, their valued passive investor. 

So there you have it  — those are the top seven things to look out for when getting started in multifamily apartment syndication as a passive investor.

It might seem like a lot, but we promise it’s not, especially if you are thoughtful and strategic and slow down to ask the important questions from the beginning.

If you do your due diligence and find a syndicator and investment opportunity that align with your investment goals – then you have all you need for an amazing passive investing experience.

Make sure to take a moment and check out our other topics, head on over to our blog, and follow us on social!

And if you would like to take your investing to the next level, take a moment and join The Kitti Freedom Club!

 

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We're Palmy ➕ Nancy Kitti 〰️ The Kitti Sisters

A sister duo team obsessed with all things financial freedom, passive income, and apartment investing + apartment syndication, who turned a $2,000 bank account into a nine-figure empire.  Now, we're sharing with you the behind-the-scenes secrets of our wealth building strategy.

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