In prior articles we discussed top questions to ask the deal sponsor(s) and how to do diligence on the sponsor. However, a question that recently came up was – how do you even find sponsors you want to invest with? In today’s quick snippet we’ll offer a few ideas.
1. Local real estate meet ups. Meet Ups are a great venue where you can meet operators that reside in your area. Often such operators are speakers at such local events, which allows you an opportunity to meet them in person one on one after the meeting and get to know them.
2. Conferences. Another great opportunity to connect with sponsors in person are conferences. These may happen to be outside of your local area. However, they would allow you an opportunity to meet a wider array of sponsors who you might not otherwise have connected with or perhaps sponsor you saw on social media and want to complete the connection via an in-person interaction.
3. Real Estate Podcasts. Podcasts are good way to learn about various sponsors, their investment philosophy, investments strategy, and even hear about past deals they worked on and how those turned out or seminars they faces and what they learned from those. Podcast hosts would often ask personal questions too, which would allow you to get to know them on a personal level.
4. Referrals from other LPs. Referrals are a great way to find sponsors as the investors sharing those names with you have presumably already had a positive investing experience with them and can provide their personal and non-marketing perspective. Conversely, fellow investors may also share negative experiences, which would provide insights into which sponsors to avoid.
5. Social Media-Newsletters. Many sponsors today are on social media (Facebook, Instagram, LinkedIn, You Tube, etc.) and have their own web sites, which allows you to passively follow them or interact with them online and get to know them over time. Most sponsors issue periodic newsletters as well, in an effort to stay connected with their investment community. Subscribing to such newsletters will give you an insight into their communication style, the types of deals they are working on, and how they think and operate.
6. Investment Clubs. Investment clubs are groups of investors that get together to evaluate deals and potentially pool their collective money to invest in deals. Group members will often exchange ideas and share experiences, which would be a great resource for sponsor referrals (and even sponsors to avoid). There are several groups out there that one can look into.
Once you identify sponsors that you like, what’s next? Get to know them over time and ideally meet them in person or at least over Zoom. This would allow both parties to develop a relationship over time. At the end of the day, despite the prevalence of social media and technology, real estate remains a belly to belly business where in-person interaction is essential in building strong relationships and also a great tool to vet your potential partners.
Download The Busy Professional’s Quick Guide To Investing In Multifamily here.
Disclaimer: The information presented does not constitute legal, accounting, tax, or individually tailored investment advice. Past results do not represent or guarantee future performance.