It might be because we team up with sponsors themselves and other industry professionals to provide education to get investors prepared for their first investment on our platform.
Our Fundamentals of Real Estate Podcast received 60,000 downloads last year and has become required listening to business students at a major U.S. university.
The reason we do this is because there is a hunger for knowledge. Investors read news that real estate can outperform many other asset classes and witness large institutional investors like the Yale endowment allocate large portions of their investments to real estate.
By the time investors join RealCrowd, they are well versed in the benefits of real estate investing and are ready to learn what it takes to participate in successful ventures. They have 2 main goals when starting in real estate crowdfunding:
Throughout their research, investors have learned that sponsorship of any opportunity is one of (if not the) most important elements of any project. They expect the following from the sponsor they choose:
To reinforce these beliefs, your offering page must do its job. That’s why we dedicated an entire chapter on how to build your offering page in this guide. Now let’s break down what we spoke about from the eyes of an investor.
A sponsor that has done several hundred million dollars of projects with solid returns (including through the last downturn) is thought to be likely to continue that trend. While the offering page gives investors a glance of what those credentials are. Investors will also visit a sponsor’s website.
Generally, the sponsors we work with have quality websites of their own. But we do provide guidance on how to improve the quality of your site so that it reflects your professionalism when investors search and find you.
We strongly recommend that you provide “proof” on your site of your historical, realized performance. This can take the form of “case studies” or “project summaries” that show investors, in more detail, what the numbers on your offering truly mean.
Investors want to partner with a sponsor who can clearly, enthusiastically and professionally convey their vision and strategy for the project.
While there is no one way to define how best to do this. RealCrowd does review all material ahead of time. This includes your webinar slide decks where we make suggestions on how to improve them.
You will have several opportunities to tell stories that articulate your strategy to investors including the offering page, webinars, and phone calls with potential investors. We also advise sponsors to hire a professional graphic designer to produce marketing collateral that is top quality.
We often hear sponsors ask, "what does your investor base look for?"
And while there are certainly trends, the reality is that each investor has their own investment preference and each will develop their own concept of what they want in a deal. Some examples include:
And the list goes on. One thing we can all agree on is that most investors seek risk-adjusted returns with quality sponsors and realistic underwriting.
At RealCrowd, it isn’t always the deals with the largest returns that sell out the easiest. Investors have responded favorably to deals where there is a massive co-invest by the principals or when a sponsor has shown stellar performance already on the RealCrowd platform.
Check out the articles below to continue learning