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. 💡 𝐍𝐨𝐭 𝐨𝐧𝐥𝐲 𝐝𝐨 𝐈 𝐰𝐚𝐧𝐭 𝐭𝐨 𝐡𝐞𝐚𝐫 𝐰𝐡𝐚𝐭 𝐢𝐬 𝐠𝐨𝐢𝐧𝐠 𝐰𝐞𝐥𝐥 𝐰𝐢𝐭𝐡 𝐭𝐡𝐞 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐲, 𝐛𝐮𝐭 𝐈 𝐚𝐥𝐬𝐨 𝐰𝐚𝐧𝐭 𝐭𝐨 𝐡𝐞𝐚𝐫 𝐰𝐡𝐚𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐨𝐢𝐧𝐠 𝐚𝐬 𝐩𝐥𝐚𝐧𝐧𝐞𝐝. 𝐈𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐧𝐞𝐜𝐞𝐬𝐬𝐚𝐫𝐢𝐥𝐲 𝐚 𝐧𝐞𝐠𝐚𝐭𝐢𝐯𝐞 𝐢𝐟 𝐭𝐡𝐢𝐧𝐠𝐬 𝐝𝐨𝐧'𝐭 𝐠𝐨 𝐚𝐬 𝐩𝐥𝐚𝐧𝐧𝐞𝐝 𝐚𝐬 𝐥𝐨𝐧𝐠 𝐚𝐬 𝐢𝐭 𝐢𝐬 𝐜𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐞𝐝 𝐀𝐍𝐃 𝐚 𝐩𝐥𝐚𝐧 𝐢𝐬 𝐢𝐧 𝐩𝐥𝐚𝐜𝐞 𝐭𝐨 𝐚𝐝𝐝𝐫𝐞𝐬𝐬 𝐢𝐭.

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. 💡 𝐑𝐞𝐦𝐞𝐦𝐛𝐞𝐫, 𝐭𝐡𝐞𝐲 𝐚𝐫𝐞 𝐧𝐨𝐭 𝐨𝐧𝐥𝐲 𝐲𝐨𝐮𝐫 𝐢𝐧𝐯𝐞𝐬𝐭𝐨𝐫, 𝐛𝐮𝐭 𝐚𝐥𝐬𝐨 𝐨𝐰𝐧𝐞𝐫𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐲. 𝐓𝐡𝐞𝐲 𝐦𝐚𝐲 𝐛𝐞 𝐩𝐚𝐬𝐬𝐢𝐯𝐞, 𝐛𝐮𝐭 𝐭𝐡𝐚𝐭 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐦𝐞𝐚𝐧 𝐭𝐡𝐞𝐲 𝐚𝐫𝐞 𝐩𝐚𝐬𝐬𝐢𝐯𝐞 𝐢𝐧 𝐭𝐡𝐞𝐢𝐫 𝐜𝐨𝐧𝐜𝐞𝐫𝐧 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐲.

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.

❌ 𝗗𝗼𝗻'𝘁 𝗯𝗲 𝗮𝗳𝗿𝗮𝗶𝗱 𝘁𝗼 𝗰𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗲 𝘁𝗵𝗲 𝘂𝗽𝘀 𝗮𝗻𝗱 𝗱𝗼𝘄𝗻𝘀 𝗼𝗳 𝘁𝗵𝗲 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆.

✔️ 𝗙𝗼𝗿 𝘁𝗵𝗲 𝗱𝗼𝘄𝗻𝘀, 𝘀𝗵𝗼𝘄 𝗮 𝗽𝗹𝗮𝗻 𝗼𝗳 𝘄𝗵𝗮𝘁 𝘆𝗼𝘂 𝗮𝗿𝗲 𝗱𝗼𝗶𝗻𝗴 𝘁𝗼 𝗮𝗱𝗱𝗿𝗲𝘀𝘀 𝗶𝘁. 𝗧𝗵𝗲 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝘄𝗶𝗹𝗹 𝗯𝗲 𝗼𝗸𝗮𝘆 𝘄𝗶𝘁𝗵 𝗶𝘁, 𝗲𝘀𝗽𝗲𝗰𝗶𝗮𝗹𝗹𝘆 𝗱𝘂𝗿𝗶𝗻𝗴 𝘁𝗵𝗲 𝘀𝘁𝗮𝗯𝗶𝗹𝗶𝘇𝗮𝘁𝗶𝗼𝗻 𝗽𝗵𝗮𝘀𝗲 𝗼𝗳 𝗮 𝗽𝗿𝗼𝗷𝗲𝗰𝘁.

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.