At Atlas, we have over 400 HNW individuals who’ve invested in our deals. Today, following several successful exits, the strong performance of current deals, and attractiveness of cash-flowing real estate, we have more demand from investors than we do quality opportunities.
While we do our best to run a fair process, the reality is that not all investors will get the opportunity to invest in each deal.
When raising capital for a new deal, we first go out to our VIP investors who’ve been with us from the beginning. Through that network of ~30 investors, we typically fill ~75% of the allocation.
The remaining 25% is offered to a mix of investors who’ve done a few deals, friends & family, and other contacts who have expressed interest in investing with us. This 25% allocation is typically spread across another ~30 investors.
In total, only ~60 individuals out of our network of 400 investors get to do any particular deal.
So how can investors ensure they see the best opportunities?
Build real relationships with members of the company. Private real estate investing is a relationship-driven business. We do deals with people we like and trust and the investors we choose to work with are no different. As part of their diligence process, investors should get to know the individuals behind the company they’re investing with. Meet them for a drink, learn about their hobbies, ask about their family. Be human.
Make sure all requests are reasonable. When you invest in a private real estate deal you’re investing largely on a trust-basis. However, there are certain expectations. Sponsors should answer the phone when you call, provide detailed investment memos, quality quarterly reporting, and get you K-1 tax documents in a timely fashion. You are the client! However, investors shouldn’t make unreasonable requests that create unnecessary work. If every investor requested some sort of analysis each quarter, we wouldn’t have any time to do deals.
Send along relevant articles and information. One of the great aspects of having 60 individual investors in a deal is that we have 60 advocates. Advocates who ask thoughtful questions, bring ideas to the table, and facilitate introductions. While it’s not required or expected, if you see something relevant to the deal you’re invested in, send it along to the operator. They really appreciate it.
Touch base from time to time and make your investment preferences known. One easy way to see deals is to stay top of mind. Check in each quarter and be clear with your investment preferences. If a deal comes through that fits your parameters, you’ll be the first one we think of. Don’t bug the Operator, but add value each time you check in and remind them you’re interested in investing.
Operators are honored that any investor would chose to trust them with their hard-earned money, but the best operators typically have more capital than they can deploy.
If you want to see the best deals, build real relationships with the operator.
What do you think?