“Do what you do so well that they will want to see it again and bring their friends.”

– Walt Disney


Imagine how life would be if your investors were so delighted with their investment that they decided to invest with you again … and again. Each time with greater confidence and greater sums of money. 

Wouldn’t that mean a huge portion of your workload cut in half for your next deal? And it’d just get easier and easier for all future deals? (We’re talking about the raising capital part of your workload.)

In this article we’re handing you the know-how so that you will know exactly how to take care of your investors so that they will invest with you again and again.


Video – How An Expert Capital Raiser Gets Loyal, Repeat Investors

This month’s video interview is with Dan Handford. Dan is one of the Managing Partners with PassiveInvesting.com, a national private equity real estate investing firm that has acquired over 2,600 units with a portfolio valued over $259mil in just over 24 months.

Dan shares his inside knowledge on: 


  • How and when to communicate with investors
  • What to say to investors if something goes wrong
  • The step-by-step process for securing capital
  • Everything you have to do to have a loyal repeat investor

Click here to watch the video and learn how to keep your investors coming back for more.


Want Repeat Investors?


Here is your FREE Resource Guide to improve that probability:


In this article I am going to show you exactly what to do to keep your investors happy so that they will invest again and again.

I am going to break down 3 simple steps to keep your investors happy:

  • Over Communicate
  • Be Transparent
  • Manage Expectations

You want your investors to become your repeat investors. That doesn’t happen automatically just because the deal is a success. 

You mean if I make people money they won’t automatically want to invest with me again?? Right! That can absolutely happen. Because if the process for them is frustrating, stressful and leaves them feeling like things weren’t above board or you’re not doing your part – yes, even if they make money – they won’t want to repeat that. 

Ever go to a restaurant where the food was great, but the service was so bad you never went back? How about a doctor that helped you, but his bedside manner was enough to make you look elsewhere – in spite of the good results? 

“The customer’s perception is your reality.”

– Kate Zabriskie

You don’t want to be that guy. If you follow these three steps and implement them in the right way, repeat investors can be the norm.

Let’s dig in. 


“The most important things to say are those which often I did not think necessary for me to say — because they were too obvious.”

― André Gide

Don’t fall into the trap of underestimating the amount of communication investors need to feel comfortable. Great sponsors get it… great communication is the key to ongoing investor relationships

Put yourself in your investors’ shoes. If they don’t hear from you for a while they start wondering, how’s my investment doing? And the anxiety ramps up. If in doubt, over communicate!

Bottom line is, the more you communicate the happier your investors will be.

What, When & How You Should Communicate

Of course, communication with your potential investors should start long before you have an investing relationship with them. 

Think of the communication process as a journey (or a funnel). At the very beginning (or the very top) you are reaching out to potential investors who may at first have no intent to invest at all. 

Your challenge is to reach out to them, educate them and build a relationship with them. How will you convince them to choose you?

That’s a topic we’ve covered in more detail before. You can check out our step by step guide Build Authority as a Multifamily Syndicator to Attract Passive Investors.

This is not the end of the journey. After those steps… 

  1. You announce to your investors that you have a deal open for funding, usually via email or webinar. 
  2. You hold an investor webinar, where you can give more information and allow investors to ask questions. 
  3. You confirm your investor’s spot in the deal and send the PPM (private placement memorandum), which includes details of how to wire the funds.
  4. After receiving the funds you confirm with the investor that the funds have been received. 
  5. You notify your investor once the deal closes.

But once a person invests with you, then what? 

​​Once you have an investor the important thing is to turn that investor into someone who will invest with you again and again.

It’s easier to keep an investor than to find a new one. Follow the steps outlined here and your loyal investor may well become an advocate for your brand, persuading others to invest with you. This is the absolute ideal outcome.

Communication Guidelines To Follow With Existing Investors

Upon Closing

As soon as the real estate syndication deal closes, let your investors know that you’ve closed on the deal. Include a document that gives your investors an overview of what to expect moving forward including the timing and logistics of cash flow distributions.

Establish A Clear Reporting Schedule

As the General Sponsor, you should provide ongoing and regular reports on the status and management of your property during the course of the investment. 

Provide general property reports monthly and more detailed financial reports quarterly. Each spring during tax season, send a K-1 for your investors’ taxes, which will report their share of the property’s income.

  • Monthly     – Send General Progress Email (Property Updates)
  • Quarterly   – Send Detailed Financial Report
  • Yearly         – Send K-1 Form For Your Investors’ Taxes

In your monthly progress email you can report on renovations, maintenance issues, occupancy rates and trends (if it improved, say why, if it reduced, say why and what you’re doing to turn things around), send photos of the property if you made improvements.

Send Monthly or Quarterly Checks

Investors want to know that their investments are actually producing cash returns. Nothing feels better than receiving a regular distribution in return for the confidence they showed in your deal. 

The sooner you can send the first one out the happier your investors will be. If the first distribution will be delayed after the deal closes for any reason let your investors know a.s.a.p. 

Decide if you want to send the distributions quarterly or monthly & be sure to communicate that expectation!

Anticipate Questions

Always answer any questions that your investor asks, no matter how frustrating or obvious the answers are to you.

The best sponsors will anticipate questions that their investors might have and they will continually send info that has all the answers.

Do this through your regular emails. They should inform and educate your investors.

Also, there will be times when market, economic or political changes might raise questions in your investors’ minds.

Why not send an extra email to cover that issue (in between your monthly scheduled emails).

To give a not too improbable imaginary scenario, maybe a new political administration introduces some legislation that affects your investors’ expected results. There might be a change in the tax implications as a result of this new legislation, for example.

Picture your investors, they have questions about this and are just starting to worry about it, then they get clear information from you about the issue. 

The result? They love you!

That kind of courtesy and ‘over communicationgoes a long way in building the relationship.

Acknowledge Questions Right Away

If you receive an email question from your investors make sure you reply right away that you got their message. 

Even when no particular response is required, acknowledge that you received their message. If a response is required but you just can’t get to it right away, let the sender know you saw the message and tell them when you will get back to them. Then do get back to them as promised.

Nothing will be more frustrating for your investors than to send messages that go unacknowledged. It’s like talking into a void and they won’t want to come back to that.

Make It Personal

Your communication with your investors, by phone, email, or face to face, will reflect how you feel about your investors.

If you really do value them and view them as equal partners then this respect and concern will show up in the tone of your communication.

Be on the lookout for opportunities to show personal interest in your investors. When you learn something new about them, make a note of it and refer to it in your future communication. This can be kind of fun and even if they think it’s a “technique” they will still appreciate your effort to go the extra mile.

If your investors send you a message, take a little extra time to read it carefully so that you can respond properly.

I’m sure you’ve had it happen to you (and you probably hate it as much as I do): you get a response to your message that shows it’s just been scanned and not even understood.

In short, take care to never leave your investors feeling that they have been ignored.

Let’s now move to our second step, the need for transparency.


Educate Your Investors

Investors will appreciate it if you make the investing process clear. You will need to be their guide to help them understand real estate jargon and the more complicated concepts.

Help them to understand the rules set by the SEC (including the recent updates to those regulations).

Keep up to date with market trends and pass that data on to investors.

Information about your fees as the General Sponsor, the structure of the deal and the returns due your investors needs to be communicated with full transparency.

Here’s a snapshot of some areas where you should take care to provide full transparency in your communication with your investors.


Sponsor Fees

Make sure that you clearly disclose information related to your fees as a sponsor. 

Explain how you get compensation from the following categories:

Upfront Fees

These are the fees that you build into the amount of money raised that pay for your time and expenses in sourcing the deal and examining its suitability. And in securing the loan and setting up the structure of the syndication for investors. 

You can refer to these as sponsor fees, acquisition fees, or due diligence fees

Asset Management Fees

Clearly disclose any compensation you will receive (it might be a percentage of rents collected) for the management and running of the property during the hold period. 

Deal Structure 

Profit Split

How will the net profits upon sale be split between the Sponsor and the investors? Help your investor to understand clearly that these profits are calculated after all the following are paid:

  • Closing costs and fees
  • Preferred returns
  • Original investor principal is returned

Exit Plan

Explain clearly what the exit plan is and the projected hold period and whether or not that is subject to market conditions. Outline your exit strategies for your investors so that they understand your contingency plans if things don’t go as expected with the deal.

Voting Rights

If your syndication is structured through an LLC, will the LLC give members voting rights as well? Your investors should understand what their voting rights are and the transferability, if any, their shares have.

Investor Returns 

Help your investors to understand the return structure and numbers.

If the return structure is straightforward, such as an 8% Preferred Return paid out quarterly, your investors will easily comprehend that.

But it can get complicated, for example with the IRR (Internal Rate of Return). Investors might not get how the IRR projection factors into their returns when the property is sold.

Explain returns clearly, from gross returns to net returns. The investor wants to understand the flow of distributions and the profit split.

Walk your investor through the waterfall structure.

For more information on waterfalls in real estate, what they are and how they work, here’s a previous article we wrote for you. Read Waterfalls in Real Estate Investment.

Make a real effort to be transparent and provide a full explanation of sponsor fees, deal structure and projected investor returns.

If your deal for some unforeseen reason does worse than expected, your honest communication will help soften your investors’ disappointment & still keep them happy.

In short, take care to never mislead your investors in any way

Moving on to our third step.


It’s best to under promise when it comes to your investor returns. Let your hard work result in a cool surprise for your investors. If you promised 12% then 10% is a failure and might put off your investors. But, if you promise 8% then deliver 10% this will be seen as a big plus and will result in loyalty. 

In all elements of the deal carefully manage your investors’ expectations. To do this, it all starts with careful underwriting.

Conservative Underwriting 

During the process of underwriting it is vital that you don’t let your desire to make the numbers fit get the better of you. Think Spock not Kirk – this is the part where logic must rule over emotion.

If you end up disappointing your investors there will be no “beam me up Scotty” solution.

Because there is money to be made in multifamily syndication you don’t need to stretch the math.

Look at this simple example of conservative underwriting:

Imagine that you’re analyzing a property and you see that a lot of the units, let’s say 20% of the units, in the apartment building have been renovated. 

You notice that the renovated units have all been getting a higher rent than the other units, let’s say an additional $200 per month. You also cross check this with the market comps for same size units in similar condition and see that they show an even higher rent per unit, $225 – $250.

How would you be tempted to underwrite this deal based on your plans to renovate the rest of the units? Would you be tempted to underwrite aggressively so as to promise larger returns to your investors? Perhaps you’d at least budget for a $200 increase in rents per unit. 

But what should you do to manage expectations?

The key is to under promise so that if things go as you hope and expect then you will be able to over deliver when the time comes. Then you will delight, not disappoint, your investors.

Underwrite the deal conservatively. If you made the increase in rent per unit $175 this gives you a $25-$75 spread (or margin of safety).

Use the same conservative approach for expected occupancy rates.

A savvy investor will review all of your financial assumptions to be certain that they add up. 

They will check:

  • Rents (regional comps – investors will expect you to be under where the market is for both before and after renovations)
  • Rent growth and occupancy
  • The T12 (Does the promised increased income make sense?)

Sensitivity Analysis

Consider providing a sensitivity analysis for your investors. A sensitivity analysis shows your investor a variety of outcomes that could result from variables outside your, or the investor’s, control.

Providing the sensitivity analysis lets your investors measure the potential impact of a particular scenario on your investment property’s numbers. It shows investors the breakeven point if there were to be a decline in occupancy or if the projected rents don’t fulfill expectations.

All of this really goes a long way toward reassuring your investors of your professionalism and in building their confidence in you as the sponsor and in the deal itself.

Operating Fund Reserves

One of the most important rules of real estate investing is that you have enough cash reserves. This way you avoid the nightmare of not having funds to care for something unexpected during operations. 

If you end up in a situation where you don’t have the funds to deal with an unexpected capital expense, you’d have two choices:

  • Do a capital call
  • Sell the property at a loss

Both of these scenarios would significantly impact your investors’ expected returns and severely damage your chances of having them invest with you on a future deal.

Experienced investors like Joe Fairless advise having an ongoing operating fund reserve of at least $250 per unit per year

To care for these possible surprise expenses in the first year, Joe also advises sponsors to have an upfront operating account fund that equates to between 1 – 5% of the purchase price.

Make sure that your forecasts are conservative and your operating fund reserves are substantial.

Want Repeat Investors?


Here is your FREE Resource Guide to improve that probability:


Keep your investors happy and they will become your loyal, long-term investors. They’ll come back for another round with you on your next deal, and they will talk to others who will also invest with you. 

This won’t happen automatically, especially if an investor -at any point in the deal- feels they have been ignored, misled or that you’ve over promised and under delivered.

Remember the restaurant with the great food but lousy service? Don’t be like that.

Keep your investors happy by over communicating, being fully transparent and by managing their expectations. Then see how they will want to invest with you again… and again.

Expanding Your Investor List

This article has been about communicating effectively with investors that are already on your investor email list to turn them into loyal, repeat investors.

But how do you expand that list?

And how do you capture the names and email addresses of potential investors in the first place?

Simple…you need a website that captures leads. 

To get your lead capturing multifamily syndication website up and running go to apartmentinvestorpro.com

We can help you to start building that investor list and your relationship with your investors the right way, right away!