We begin by quizzing Jeremy about the rising popularity of investor portals. He speaks about the advantages these bring, what they might say about a particular operator, and if they are even a necessary part of the investment process.
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Operators who are looking for advice about how to distribute opportunities amongst their different tiers of investors might also find some of Jeremy’s later points valuable. We hear about how investors can make sure they get a piece of the pie if they find that higher shareholders are hearing about opportunities before them. Finally, we talk more about the dangers of sharing sensitive information between investors and operators, and how to mediate these.
Lance helps us understand the friction between LPs and GPs and how to minimize that. Lance also discusses institutional money – its pros and cons. Tune in for this rich discussion and enjoy the show!
Key Points From This Episode:
- More points on the topic of investor/operator relations.
- Jeremy dives into detail on the rise, function, and value of investment portals.
- Are CrowdStreet portals reliable?
- Jeremy talks about three best practices around operator opportunity distribution.
- How does it benefit the operator if they send out their opportunities to all of their investors?
- What are the pros and cons of webinars, calls, and emails in presenting new deals?
- The value of providing feedback as an investor as far as long-term relationships with operators go.
- How should operators transfer and handle sensitive investor information?
- Jeremy talks about a hacking incident and how to avoid situations like this.
- Jeremy compares wire with ACH transfers. Which does he prefer?
- Lance discusses what the investor needs to think through before investing with a sponsor.
- What kind of reporting should be seen from a sponsor?
- What are the steps to become ready for institutional money?
“I would say that whether or not there’s a portal, it doesn’t change too much in that you’re reporting requirements. Then what you would expect from a syndicator should stay the same. So, it’s just nice to have it in a unified place. – Jeremy Roll
“I wouldn’t tell anybody out there to judge whether they should invest with someone, or a syndicator, based on whether they have a portal or not, honestly… Older syndicators with portals might tend to be more tech-savvy, but that’s about the beginning and end of it.” – Jeremy Roll
“Institutional investors, their expectation just to survive their due diligence process is that these things will be in some sort of data room that they can look at. Right. So, if you want to go that route, then you’re going to have to be very organized. And now, I think that the downside is that institutional capital really equals expensive capital.” – Lance Pederson
Links Mentioned in Today’s Episode:
About Jeremy Roll
Jeremy Roll started investing in real estate and businesses in 2002 and left the corporate world in 2007 to become a full-time passive cash flow investor. He is currently an investor in more than 70 opportunities across more than $1 billion worth of real estate and business assets. He is the founder and president of Roll Investment Group. Jeremy manages a group of over 1,000 investors who seek passive, managed, cash flowing investments in real estate and businesses. Jeremy is also the co-founder of For Investors By Investors (FIBI), a non-profit organization that was launched in 2007, with the goal of facilitating networking and learning among real estate investors in the strict, no-sales pitch environment. FIBI is now the largest group of public real estate investor meetings in California, with over 27,000 members. Jeremy has an MBA from The Wharton School, is a licensed California Real Estate Broker (for investing purposes only), and is an Advisor for Realty Mogul, the largest real estate crowdfunding website in the US. Jeremy welcomes e-mails (firstname.lastname@example.org) to network with, or help other investors, and to discuss real estate or business investments of any size.
About Lance Pederson
Lance Pederson has worked in the middle-market real estate space for more than 13 years and has helped over 180 entrepreneurs architect pooled investment funds. He’s passionate about the power of transparency in building trust between sponsors and investors.
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