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When working in real estate and trying to get a project off the ground, investment is the most important thing that you need to think about. Therefore, your job as a real estate owner is to make it as easy as possible to generate funding for your project, by enticing investors and making sure that you maintain good relationships with them. Maintaining effective real estate fundraising enablement is how you will succeed in your endeavors. And with good advice, a holistic strategy and the right tools, you can greatly improve real estate funding enablement.
Look After Your Existing Investors
One of the biggest things that some real estate companies miss is the fact that they need to look after their existing investors. They focus instead on generating as much investment from as many different places as possible. The truth is that your existing investors are the easiest relationships to cultivate as you already have them. If you treat them well, they’ll be able to grow with you and they’ll be more inclined to back your projects with even more funding in the future. This can have the same impact as onboarding a number of new investors in the long run.
Pay Distributions on Time
Investors want to see a return on their investment. This is why making sure that you quickly pay them what is owed is critical to ensuring your long-term success. Identify when investors need to be paid and keep to this schedule. If you can’t for any reason, let them know well in advance to minimize shocks.
Keep Investors Updated on Project Progress
Another thing that investors need to be updated about is the actual progress of a project. They’re going to want to know when they’ll get to the completion stage and can start making a return. This is why you should find out how your investors like to be informed and keep them regularly updated on their schedule to avoid potential issues.
Pitch Investors New Projects From Time to Time
Just because they’re working with you on one project doesn’t mean they wouldn’t be interested in backing you on another project, particularly if you’re managing them well. When a new profitable opportunity comes up, be sure to send across some details to your existing investors, just in case they’re interested. This goes a long way to maximizing your real estate fundraising enablement.
This may seem particularly obvious, but some real estate companies have a tendency to either lie, run fraudulent projects, or withhold information from their investors fearing how they would react to bad news. This is not an effective way to run your investments as you will lose your existing investors and you will tarnish your reputation, which will make it harder for you to get investment in the future.
Make Use of Data and Analytics to Plan Your Next Move
Data and analytics are king in real estate fundraising enablement. Having a property-specific analytics dashboard will provide you with key information about your real estate projects. For example, you can get information about what percentage of your target investment has been raised, how many investors are backing the project and how much funding you’ve raised over a specific period of time. This gives you much greater visibility into how your company is working and whether you’re fundraising efficiently.
There are some main factors you should look at when looking at your analytics. How much of your target funding has been raised? How many investors have backed your project? What percentage of investor distributables have been delivered? How close is your project to final completion? How has your level of funding changed over time? Using this data to inform your decisions will enable you to make better decisions and reduce risks rising for unanticipated factors.
Create a Better and Easier Investment Environment
One of the easiest ways to create a better investment environment is to make use of software solutions, which can have a massive impact on how many investors you work with and how they are managed. These software solutions can include a variety of tools that help you better manage your investors and create more funding opportunities for your projects.
Inbound Lead Management
It’s easier to manage opportunities when you have a visual on the leads that are coming through to you. Tools make sure you don’t miss leads and help you track how close your investors are to closing as the process continues. You will also in some cases get notifications about any status changes so you can quickly respond to them and become more efficient.
Market Your Investment
Of course, you need to find a way to convince your leads to invest in your project. Some solutions allow you to easily create attractive digital brochures highlighting all the benefits of investing in your project and a visual indicator of what success will look like for these projects. These types of marketing tools will increase your close rate percentage and your profit.
Digitize the Deal Process
Some solutions make it much easier for investors to actually sign and agree to contracts with real estate companies. These solutions include features such as digital signing, which decreases the time to close, easier dissemination of investment contracts to interested parties, and simplified communication. Research has shown that digital signing increases close rates.
The aim of this article was to explain the importance of real estate funding enablement and give advice on how to improve it. The best way to do this is to make use of a combination of a soft skills approach, looking after your investors, and technology to make the whole investment process easier, simpler, and reduce the amount of time taken to close a deal. This will increase your overall cash flow and will allow you to grow your real estate company much quicker and with fewer issues than traditional approaches.