Now you’re probably wondering what it takes to join our platform? The first step for any sponsor is to meet the minimum criteria we set.
To qualify, you must:
Have at least $50MM of transaction value AND 10+ years of principal experience.
Have at least $100MM of transactional value AND 7.5+ years of principal experience.
First, review the Sponsor Criteria to confirm you meet the requirements. If you do, then email our Real Estate team to arrange a call, — email@example.com. You will be required to complete a two-page application and supply a full real estate schedule of both the current portfolio and all sold properties.
Step one in working together is to fill out the application and track record. The application should be filled out at the sponsor-level rather than the entity level.
The track record attached is a template and while it's preferred to fill in that form, oftentimes it's easiest for the Sponsor to simply share an existing form track record that is already on file - but nonetheless this template will show you the level of information that we are seeking. The track record must be complete and address all deals executed on, by each of the principals, in a true principal capacity, whether as a part of this current entity or prior to.
Once we have received your application and track record our due diligence team will review and reach out with any questions they have prior to approving you as a RealCrowd sponsor. This process usually takes around a week but may take longer depending on how quickly you are able to answer any questions that come up.
Now let’s go into a little more detail. Because each sponsor is unique in how they operate their business, it is more useful to highlight the differentiating factors that will ensure you find success on the RealCrowd platform.
It is not so much about what we look for, but what quality investors want.
The modern investor knows that real estate ventures can be saved or lost by the experience of a sponsor.
At the start of this guide, we talked about the demand that existed within the investment community for private commercial real estate and now that the asset class is more accessible, investors are wasting no time getting educated to take advantage of the opportunity.
The advice echoed by experts is to find sponsors who are well-versed in the art of real estate investing. And why RealCrowd promises its members access to quality sponsors who have more than $50MM of completed projects under their belt.
This figure represents a tangible benchmark that indicates to investors that a sponsor can execute on their strategy and draw from a solid knowledge base whenever there is trouble.
RealCrowd works with sponsors that buy or sell multiple properties per year.
For sponsors, there are many avenues to raise equity and it may not be worth the trouble to get qualified and go through the process of raising equity online if your intention is to buy one property every couple years.
Joining the RealCrowd platform goes beyond the need for equity on any given raise. You are there to build long-term relationships with investors so that you can make good use of them for future projects.
Investors on RealCrowd become members because they have long-term goals and look for sponsors that align with their vision. When they find the right sponsor, it makes sense to stick with that sponsor for multiple investments.
Your goal should be to generate long term value with each equity raise by building on those investor relationships.
RealCrowd investors expect sponsors to show, not tell. They want to know that you have a history of positive performance.
There’s no definite dollar amount here.
Instead, your historical narrative should include strategies that made your investors money over the long-term. We all know that real estate is cyclical by nature and sensitive to market forces beyond your control.
What’s more important is getting investors to a level of comfort that propels them to take the next step. They look for companies that know how to deal with problems and find ways to protect their investment capital.
Sponsors must be familiar with reporting and distributing to individual investors and ideally, be familiar with investment management systems like IMS or Juniper Square to facilitate the communication.
These software systems save sponsors from fussing around with spreadsheets all day and takes reporting to a whole new level. Investors are provided a portal that presents key information about the investment. This creates transparency, giving investors a chance to dig through the analysis and feel confident in their choice.
There is a trend in the industry where other crowdfunding companies are starting to invest in their own form of Investor Management Portal. But we believe that this limits sponsors in how they customize their reporting and hurts their reputation in the long run.
Finally, investors expect sponsors to present themselves well in their written communications, and in direct conversations, while providing professional looking offering documents and marketing collateral.
The JOBS Act made commercial real estate investing more popular than ever. It has also made it much more difficult to tell apart the professionals from the amateurs. We built a platform for professional sponsors with experience who existed before the evolution of crowdfunding, and will continue to exist regardless of it. This is how we protect the integrity of the industry, and ensure win-win scenarios for all parties involved.
After all, we’re in it for the long haul as well.