The introduction of crowdfunded syndication within the real estate industry has had a tremendous impact on how capital is solicited, distributed, and utilized. With the right syndicate fundraising strategy, a firm can operate with a much more robust capital stack than would otherwise be possible. However, there is also no denying that the real estate fundraising space has also become much more crowded.
With investment properties producing greater yields than ever before, both institutional and individual investors have begun frantically looking for ways to capitalize. In order to attract the capital, your firm needs to succeed it will need to start by investing in the right resources.
One of the most important decisions a syndicate will make is which capital raising and investment management platform they will use over the course of the project. This decision, ultimately, will directly affect their ability to raise capital and stay organized throughout the course of the project.
One of the best platforms for capital raising and investment management is SyndicationPro. This platform, along with many others, offers the tools and infrastructure syndicates need in order to guide their project from start to finish. Below, we will discuss some of the benefits that can come from choosing to use such a platform.
Reach a Broader Audience
In the past, fundraising within the real estate space was largely focused on finding the “whales”—large, risk-averse investors with large amounts of capital.
In the crowdfunding era, however, this dynamic has considerably changed. In order for sponsors to successfully execute a project, they will need to have access to a very wide audience. A good capital raising platform will make it easy to maintain a large base of prospective investors without needing to waste any resources. These platforms will be equipped with investor customer relationship management (CRM) features, such as segmented contacts, mass e-mailing, e-mail synch, and relationship history. In theory, you could manage hundreds, even thousands of relationships all from one centralized location.
Accelerate the Fundraising Process
One factor that separates the best sponsors from the less-than-best is the fundraising timeline. If a sponsor can convert a prospect into an investor in a week, instead of a year, they’ll be able to raise the capital they need considerably more quickly. Ultimately, this helps accelerate the cash flow cycle and improve ROI.
With a good capital raising and investment management platform, you can begin directly engaging your leads as soon as they emerge. You’ll be able to share upcoming deals, communicate directly, and schedule an introductory phone call. Developing an active, rather than passive, management process can help decrease the time to closing and make fundraising more efficient.
Automate Essential Processes
Once you have developed a vast network of possible investors, there will be many small tasks that you’ll need to complete on a regular basis. Some of these tasks will need to be done manually, of course, but there are also many tasks that can be easily automated. Automated emails, for example, can help you keep an open line of communication with minimal inputs.
With the right platform, you will also be able to link external applications together—such as Google Sheets, Trello, and other apps—without needing to manually make each entry by hand. As technology continues to improve, more processes can be automated, helping you save even more time.
Of course, new technological developments can help us do much more than just automate processes. For example, once your leads have been qualitatively classified, you will be able to efficiently sort them into groups and match them with prospective investment opportunities. You’ll also be able to gather larger swaths of information and data with ease, helping you make more informed decisions as a syndicate sponsor. Better technology also makes it easier to generate reports—both predefined and customized.
Additionally, most real estate syndication platforms now allow you to make calls and texts directly through the platform (rather than an outside line), helping to centralize and streamline your communication processes even further.
Facilitate ACH Payments
Naturally, one of the most important tasks you’ll face as a syndicate is facilitating ACH payments. These payments, ultimately, will be key to maintaining positive relationships with your investors—an issue with payment is one of the most common frustrations faced by investors and can lead to many long-term problems for your enterprise. Investing in a platform that makes it easier to facilitate payments will be very beneficial in the long run. There are a few things you’ll need to keep in mind when setting up a payment system, perhaps the most important of which is security.
A good syndicate platform will help offer a wide range of payment security features (such as double confirmation) to help ensure funds are all exactly where they need to be. ACH (automated clearing house) payments are among the most common types of payments within this space, meaning that developing the right kind of payment infrastructure is absolutely crucial.
Lastly, the main reason your real estate syndicate should invest in a syndicate management platform is that it makes it much easier to stay organized. As your firm grows, there will inevitably be many new things you need to keep track of—having all the information you need in a centralized location can help you have a better awareness of how your company is performing and also help you avoid needless errors.
With follow-up reminders and tasks, you can be aware of what you need to do on any given day. Additionally, having a centralized document hub will help make it easier for you to find any information you are looking for. Your financials, your contacts, your calendar, and other essential components of your business can all be neatly organized and coordinated, allowing you tocontinue fundraising with greater ease.
You can manage your time and get all the necessary insights in one place by integrating technology-driven solutions, such as an investor portal.
If you are running a real estate syndicate, then you need a platform that is designed to address your specific needs. With better technology, security, automation, and syndication features, these platforms have proven themselves to be more beneficial than ever before.