Investor Management and Investor Communications Are a Key For Winning Capital For Acquisition Growth

Investor communications is a critical component to a long term investment opportunity. After all, no investors can equal no new investments. More important thorough ongoing investor communications is also a part of risk mitigation. If issues crop up that require capital having the investors in the loop and fully appraised of the seriousness of the issue is a good way to save the investment.

What constitutes good investor communications? The obvious first element is full and open communication. Second, the communication must be regular. Next, the communication must be clear. If action is required from the investor they must understand this and understand what is expected of them. They also must understand the consequences if they don’t take the required action.

With this in mind, what should be communicated? And how often should the information be communicated?

  1. Investors should receive regular statements of income, cash flow, and updated balance sheets.
  2. Investors should receive trends on information from the report. Is income trending up? How much? What is driving it? When will it level out? Or is income headed downward and why? Expenses should be looked at in the same manner.
  3. Occupancy trends, trends on marketing costs, insurance, taxes, and other major cost factors should be described.
  4. Competing property facts should be followed. Understanding how a property is fitting in the market is an important part of a successful investment.
  5. Investors should receive an estimate of taxes at least a quarter before year end.
  6. Investors should receive year end statements by the 2nd week of February.
  7. Tax statements should be delivered by the 1st or 2nd week of March.
  8. The year end report should be delivered at the end of the first quarter after year end.
  9. Monthly or quarterly investors should receive statements and updates on their investment. Once a year is not adequate.

This describes effective investor communications. However, great communications is easily a possibility in our Internet connected world. Webinars allow getting all investors together and walking through a presentation of the property(ies) condition, financials, and other issues worth discussing. These calls are also excellent capital raising and development events. First, they are closed events and can’t be misconstrued as public. Second, the information offered is on point for investor development or further investment collection. In the absence of a webinar, there are free and reasonable conference call services that are worth considering as well. The great deal about monthly communication is almost all investors will feel that they are being over communicated to which is great for you, your project, and your future investments! So why not do it RIGHT and step up to the next level of investor communication.

Blake Ratcliff owns and operates residential property. Blake founded the International Residential Real Estate Investors Association (IRREIA) for investors in 2010.

IRREIA provides tools, templates, and information to members for investing. IRREIA screens investments and presents them to members in the paid area of the site. Additionally, most tools, templates and information requires paid membership. Join to have the opportunity to participate in investments.

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