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  • Aaron

Passive Investor Series Part 11: Communication

This post originally appeared as the writer's LinkedIn "Passive Investor Pet Peeves" series. It has been re-posted and edited here with permission.

As a passive investor, receiving periodic updates about my investment helps me stay on top of the current status of the property and operator. It also allows me to see the operator's ability to follow through on their business plan. ๐Ÿ’ก ๐๐จ๐ญ ๐จ๐ง๐ฅ๐ฒ ๐๐จ ๐ˆ ๐ฐ๐š๐ง๐ญ ๐ญ๐จ ๐ก๐ž๐š๐ซ ๐ฐ๐ก๐š๐ญ ๐ข๐ฌ ๐ ๐จ๐ข๐ง๐  ๐ฐ๐ž๐ฅ๐ฅ ๐ฐ๐ข๐ญ๐ก ๐ญ๐ก๐ž ๐ฉ๐ซ๐จ๐ฉ๐ž๐ซ๐ญ๐ฒ, ๐›๐ฎ๐ญ ๐ˆ ๐š๐ฅ๐ฌ๐จ ๐ฐ๐š๐ง๐ญ ๐ญ๐จ ๐ก๐ž๐š๐ซ ๐ฐ๐ก๐š๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ ๐จ๐ข๐ง๐  ๐š๐ฌ ๐ฉ๐ฅ๐š๐ง๐ง๐ž๐. ๐ˆ๐ญ ๐ข๐ฌ ๐ง๐จ๐ญ ๐ง๐ž๐œ๐ž๐ฌ๐ฌ๐š๐ซ๐ข๐ฅ๐ฒ ๐š ๐ง๐ž๐ ๐š๐ญ๐ข๐ฏ๐ž ๐ข๐Ÿ ๐ญ๐ก๐ข๐ง๐ ๐ฌ ๐๐จ๐ง'๐ญ ๐ ๐จ ๐š๐ฌ ๐ฉ๐ฅ๐š๐ง๐ง๐ž๐ ๐š๐ฌ ๐ฅ๐จ๐ง๐  ๐š๐ฌ ๐ข๐ญ ๐ข๐ฌ ๐œ๐จ๐ฆ๐ฆ๐ฎ๐ง๐ข๐œ๐š๐ญ๐ž๐ ๐€๐๐ƒ ๐š ๐ฉ๐ฅ๐š๐ง ๐ข๐ฌ ๐ข๐ง ๐ฉ๐ฅ๐š๐œ๐ž ๐ญ๐จ ๐š๐๐๐ซ๐ž๐ฌ๐ฌ ๐ข๐ญ.


As an operator, providing periodic updates allows us to update investors on what's happening at the property. This communication also allows us to maintain top-of-mind awareness with investors. Instead of sending an email to them about closing on another property or trying to push another investment their way, an investor is going to be more willing to open an email that is talking about their investment. ๐Ÿ’ก ๐‘๐ž๐ฆ๐ž๐ฆ๐›๐ž๐ซ, ๐ญ๐ก๐ž๐ฒ ๐š๐ซ๐ž ๐ง๐จ๐ญ ๐จ๐ง๐ฅ๐ฒ ๐ฒ๐จ๐ฎ๐ซ ๐ข๐ง๐ฏ๐ž๐ฌ๐ญ๐จ๐ซ, ๐›๐ฎ๐ญ ๐š๐ฅ๐ฌ๐จ ๐จ๐ฐ๐ง๐ž๐ซ๐ฌ ๐จ๐Ÿ ๐ญ๐ก๐ž ๐ฉ๐ซ๐จ๐ฉ๐ž๐ซ๐ญ๐ฒ. ๐“๐ก๐ž๐ฒ ๐ฆ๐š๐ฒ ๐›๐ž ๐ฉ๐š๐ฌ๐ฌ๐ข๐ฏ๐ž, ๐›๐ฎ๐ญ ๐ญ๐ก๐š๐ญ ๐๐จ๐ž๐ฌ ๐ง๐จ๐ญ ๐ฆ๐ž๐š๐ง ๐ญ๐ก๐ž๐ฒ ๐š๐ซ๐ž ๐ฉ๐š๐ฌ๐ฌ๐ข๐ฏ๐ž ๐ข๐ง ๐ญ๐ก๐ž๐ข๐ซ ๐œ๐จ๐ง๐œ๐ž๐ซ๐ง ๐Ÿ๐จ๐ซ ๐ญ๐ก๐ž ๐ฉ๐ซ๐จ๐ฉ๐ž๐ซ๐ญ๐ฒ.


Granted, some passive investors want to be totally passive and want nothing but mailbox money. For others, they may want to know how the property is going and whether the projections you made in the OM are coming to pass.


โŒ ๐——๐—ผ๐—ป'๐˜ ๐—ฏ๐—ฒ ๐—ฎ๐—ณ๐—ฟ๐—ฎ๐—ถ๐—ฑ ๐˜๐—ผ ๐—ฐ๐—ผ๐—บ๐—บ๐˜‚๐—ป๐—ถ๐—ฐ๐—ฎ๐˜๐—ฒ ๐˜๐—ต๐—ฒ ๐˜‚๐—ฝ๐˜€ ๐—ฎ๐—ป๐—ฑ ๐—ฑ๐—ผ๐˜„๐—ป๐˜€ ๐—ผ๐—ณ ๐˜๐—ต๐—ฒ ๐—ฝ๐—ฟ๐—ผ๐—ฝ๐—ฒ๐—ฟ๐˜๐˜†.


โœ”๏ธ ๐—™๐—ผ๐—ฟ ๐˜๐—ต๐—ฒ ๐—ฑ๐—ผ๐˜„๐—ป๐˜€, ๐˜€๐—ต๐—ผ๐˜„ ๐—ฎ ๐—ฝ๐—น๐—ฎ๐—ป ๐—ผ๐—ณ ๐˜„๐—ต๐—ฎ๐˜ ๐˜†๐—ผ๐˜‚ ๐—ฎ๐—ฟ๐—ฒ ๐—ฑ๐—ผ๐—ถ๐—ป๐—ด ๐˜๐—ผ ๐—ฎ๐—ฑ๐—ฑ๐—ฟ๐—ฒ๐˜€๐˜€ ๐—ถ๐˜. ๐—ง๐—ต๐—ฒ ๐—ถ๐—ป๐˜ƒ๐—ฒ๐˜€๐˜๐—ผ๐—ฟ๐˜€ ๐˜„๐—ถ๐—น๐—น ๐—ฏ๐—ฒ ๐—ผ๐—ธ๐—ฎ๐˜† ๐˜„๐—ถ๐˜๐—ต ๐—ถ๐˜, ๐—ฒ๐˜€๐—ฝ๐—ฒ๐—ฐ๐—ถ๐—ฎ๐—น๐—น๐˜† ๐—ฑ๐˜‚๐—ฟ๐—ถ๐—ป๐—ด ๐˜๐—ต๐—ฒ ๐˜€๐˜๐—ฎ๐—ฏ๐—ถ๐—น๐—ถ๐˜‡๐—ฎ๐˜๐—ถ๐—ผ๐—ป ๐—ฝ๐—ต๐—ฎ๐˜€๐—ฒ ๐—ผ๐—ณ ๐—ฎ ๐—ฝ๐—ฟ๐—ผ๐—ท๐—ฒ๐—ฐ๐˜.


As an operator, how often do you communicate with investors? Why?


As a passive investor, how often do you receive communications from operators?


Most operators will provide at least monthly or quarterly updates on the property. Anything less than quarterly should cause some concern.

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