Meet RealCrowd’s Minimum Criteria for Sponsors

To qualify, you must:

• Have $50MM+ of completed projects as a Principal excluding land and for-sale residential.
• Have 5 years minimum of Principal level experience where each Principal is a General Partner or Managing Member of an ownership entity that has real cash equity invested (and at risk) and has a direct role in the project’s execution. If there are two acting Principals, a total of 10 years is required.
• In special circumstances, a sponsor may provide information to validate their past experiences as it relates to owning and operating real estate and acting as a fiduciary to their investors. If this experience is significant, even if the minimum criteria noted above is not met (either because the sponsor does not qualify as a Principal or otherwise), RealCrowd reserves the right to deem that sponsor to have met its minimum criteria.  Such special circumstances, if any, are detailed on the Sponsor Due Diligence Report.

Fill Out an Application and Conduct Our Sponsor Due Diligence

Once you have approved the investors accreditation, we will distribute the documents to them to review and sign. Our team will format all of your offering documents for easy integration of electronic signature.

E-Sign and Store Documents

This is another time saver for sponsors. The signing process is really quite simple. Once the documents have been executed by investors, you will be notified automatically to counter-sign via email.

Documents can be safely stored and shared easily through our website. You can also download copies at any time for your records.

Accept Funds into Your Account

Since you have already supplied us with wiring Instructions for each of the investments during the onboarding phase, funds can be wired directly to the account of your choosing.

RealCrowd never takes possession of any funds nor are we legally allowed to do so. We operate under the direct model which means we are not a brokerage, nor do we create a special purpose entity to raise funds ourselves.

Another piece of information we collected from you was the deadline for wiring funds. We make this date known to investors via the offering page and prior to the wiring deadline, we send investors reminders and instructions via email.

Download Investor Contacts for Your Own CRM

At any point, you can download a CSV file containing the contact information for all of your new investors. Use this information for your future reporting and distribution or import it into any accounting or investor relationship management software you may use.

We are working everyday to optimize the online syndication process for sponsors. Even when you are done raising funds, you can still use our platform to communicate with your investors for any reporting or distribution matters.

What Type of Sponsor Finds the Most Success with RealCrowd?

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.  

Sponsors with experience

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 on their strategy and draw from a solid knowledge base whenever there is trouble.

Sponsors who are active

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.

Sponsors with a proven track record

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 who are transparent in their reporting

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 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.

Sponsors who present themselves well to investors

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.

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