Real estate investors are integral to the success of any property business.
Investors allow property ownership and management groups to develop new buildings, or vastly improve sustaining assets, by providing the necessary funding.
When it comes to multifamily investment, there is no shortage of offers on the table for investors right now.
Real estate investors will pour cash into the deals with the most potential, but that property’s potential might take some hard work to actualize.
That's where a property management team comes in.
Investors love a great property management team
With a property management company, potential investors can delegate the nitty-gritty work of improving and optimizing the site to an experienced team of professionals.
When investors purchase an existing property, it comes with existing problems. When funding a new project, investors will need an on-site management team to ensure everything goes to plan with the build.
The bottom line is, investors can use property managers to get the most out of their real estate investing funds.
Conversely, property management companies need investors to continually find new work and new projects to take on.
Property management companies benefit most from forming close, symbiotic relationships with investors.
To ensure your team is getting a bid at the best management opportunities, you’ll need to understand how to attract the right investors and secure their trust (and funding).
Keep reading to learn how.
Why is it important to attract real estate investors?
Real estate investors have the capital to bring multifamily real estate projects to life.
There are many property management companies looking to secure a new building at any given time.
As such, investors rarely need to hunt down these opportunities on their own.
Real estate investors will know about the management options that are presented to them.
Furthermore, real estate investors are most likely to put funding into projects that show the highest potential.
Getting a real estate investor to see your property management company's worth, and how you can maximize their investment potential, is crucial.
Real estate investors are invaluable roleplayers in bringing new projects to life and strengthening a property portfolio.
And as a property manager, it’s important that you understand the role of your property management team and how to pitch your value to potential investors.
Becoming fluent in presenting your real estate investment as a worthwhile venture for investors is important to being able to acquire investors.
5 Tips for Attracting Real Estate Investors as a Property Manager
If you're a property manager looking to attract investors, you have to educate yourself on:
- What makes a property management team attractive to investors
- The pain points of real estate investing, and
- How to showcase your unique value to solve those problems and help make their property a success.
You’ll also need to understand where to find reputable investors as well.
Let's talk about ways to attract investors:
1. Start with your professional network
It’s not uncommon for professionals in property management to have a valuable network of investors at their fingertips already.
Investors work closely with property managers all of the time and it's possible a property manager has multiple professional connections they can ask about new projects and potential partnership opportunities.
2. Show investors your property management prowess
It's important that investors know the property is in good hands.
Investors most commonly want to invest in properties that will run smoothly without them having to intervene. A smooth-running property is a more profitable property.
An experienced property management team is integral to the success and profitability of a building.
As a property management company, you may have case studies of other buildings you’ve taken over and improved.
For example, you may have taken over a building with high delinquency in the past, and quickly resolved delinquency for better profitability.
These experiences are the ones you will want to include in your pitch when looking to partner with investors on a property project.
They want a property manager who can handle the good, bad, and ugly of a property. The stronger the property management team, the more likely the project is to thrive.
3. Lean on social media
Social media is a great way to connect easily with people you might not have access to in real life.
When it comes to finding new clients for a property management firm, LinkedIn is a particularly useful tool. Owners and investors are typically active on LinkedIn. Some may even post new acquisitions regularly.
To use LinkedIn to effectively find investors, you’ll want to find a few active investors or ownership groups in your area that you’d like to work with.
Be sure to follow them on LinkedIn to keep up with their posts and activity. You should start small by regularly engaging with their content and updates.
At the same time, you should be building out your property management firm's presence on LinkedIn.
So, when investors click on your LinkedIn page after you like or comment on their content, they see what your company can provide.
Luckily, LinkedIn alerts you whenever someone checks out your page. Once you’ve got an investor to peek at your page, it’s the perfect time to message them and open up a conversation.
4. Join local real estate investing groups, associations, and attend events
Almost every state has an apartment association.
Apartment associations are an invaluable tool for property managers looking to connect with owners and investors.
For a small fee, you can gain membership to your state’s apartment association. Then, take advantage of the several resources offered.
This will give you opportunities to attend local networking events and conferences, sponsor events or fundraisers, and connect with local leaders in the industry.
The visibility these associations provide is crucial to gaining meaningful connections that can attract investors to your firm.
5. Invest in paid advertising
Though the upfront cost can be hefty, paid ads are one of the quickest ways to attract the specific audience you're looking for.
You can run ad campaigns on Google, Bing, LinkedIn, and other platforms that are optimized to reach investors and ownership groups.
You’ll want to make sure your advertisement is optimized to show investors your value. Then, simply watch as the leads flow in!
How to market a for-sale property to investors
Real estate investing isn't just about buying and managing property.
On the flip side, when it’s time to sell a property, it’s equally important for owners and investors to market their property properly and put together a good real estate deal to get the greatest return on investment.
There are several ways owners and investors can market their for-sale property.
1. Focus on improvements made
Take a look at the time the asset was owned by you or your company. Ideally, you have made some improvements to the property and its operations.
For example, perhaps you completed several capital improvements that allowed you to increase the rent per square foot.
Or maybe your property management firm was able to decrease delinquency, optimize NOI, or minimize operating costs.
Whatever improvements you have successfully completed during your ownership of the property should be clearly outlined in your pitch to potential buyers.
This allows you to raise your asking price and support your asking price by showcasing the new value this property holds after your ownership.
2. Identify your target investor
It’s important to know your audience when looking for a real estate investor to purchase your property.
For example, if you are selling a student housing asset, it wouldn’t make sense to go after investors whose portfolio primarily consists of conventional assets.
Look for investors who have recently acquired projects similar to your own.
You should look for investors who have a track record of acquiring projects that are similar to yours in size, asset class, and location.
You can also use professional websites like LinkedIn to explore what investors are looking for in new projects or recently acquiring new buildings.
By targeting active investors in your area, you have a better chance of selling the property quickly.
3. Utilize financial reports
Circling back to the importance of showing improvements made, it’s important to show you are capital efficient and net positive in your operations of the current property.
For this, it’s important to use financial reports to provide potential real estate investors with tangible numbers. Investors will not want to fund a project that is bleeding money.
Instead, they will choose projects that are lean with a positive net operating income.
Put together a comprehensive financial analysis of your property to showcase your value to investors.
If there are any areas of concern, it's wise to have a good case as to why certain aspects of your property have underperformed, and show what steps you have taken to improve it.
Use these tips to find new investors
Property management companies and real estate investors must have a symbiotic business relationship for both parties to thrive.
Investors want real estate investing projects that outperform competitors, and to do that, they seek property management firms that know how to maximize the revenue potential of a property.
Property management companies need real estate investors to find properties to manage.
By efficiently working with investors, property management firms can build a great reputation for themselves, allowing them to take on new clients. Both parties profit from a successful partnership.
If you're a property manager looking to take on new clients, or a real estate investor looking for a management firm, showing value is always top of mind.
At the end of the day, all sides want the same thing: for the property to make money!