If you are a multifamily syndication investor, bringing investors together is an uphill challenge. This is because unlike single-family homes, apartment complexes involve a different set of dynamics. It’s how you understand these dynamics which enables you to form a solid syndication that benefits everybody down the line.
One thing’s for sure, teamwork has to form the very foundation of your business model. After all, your investors are in it for the cash flow. It’s important to work closely with your investing team. This includes working with real estate brokers, and underwriters. You also need to collaborate with the property management company, contractors, Bookkeeper, community managers, and your legal team.
At any rate, you will have to treat your syndication more like a team sport. Think of the Chicago Bulls during Jordan’s time, or the Miracle Mets when they won the World Series in 1969. We can learn a lot of important lessons from the experiences of these famous sports teams.
The thing is, much of the challenge in managing a syndication lies in the fact that you have a diverse team. It is composed of individuals with different responsibilities and, consequently, have different approaches to dealing with a given situation. Misunderstandings can give rise to conflicts, and these are exactly the kind of circumstances you would want to avoid.
Still, at the end of the day, you will find that the diverse skills and personalities are an advantage. You only need to foster a culture of teamwork. This you can achieve by applying these tips:
1. Be a coach
Don’t just be the “guy who gets everything done.” You can be the guy who motivates others to do the best they can in their line of work. A multifamily syndication is about working collectively in order to achieve your goals. Being a syndicator, your job is not limited to viewing the accounting books and asking your property managers to collect more revenue. You should also focus on motivating your team to do great in their line of work. In my case, I would start my day by sending out motivational quotes and good morning messages to both the investing team and the accounting team of the syndication.
2. Do a huddle
Before any game, the world’s top sports teams would come together and discuss their game plan. A multifamily syndication should also go the same way if it wants to succeed in getting a positive cash flow for investors. When you do a huddle with your team, you are able to come up with effective strategies that allow you to overcome any challenges that might come your way. At my company, we often do monthly and quarterly meetings which allowed us to track our progress and determine what else is there to do moving forward.
3. Be transparent
Respect is an important part of being in a team, likewise in being a part of a multifamily syndication. The best way to show respect, especially to your investors, is to show them the books and the numbers. You don’t have to hide anything since it’s always better to be honest when it comes to reporting about cash flow performance. I found this beneficial in my experience. Our accounting books, invoices, and other documents are openly accessible. Investors can request to view the numbers any time. This, in effect, has allowed them to stay for the long ride since they are confident that their investments are performing as expected.
If you start your business as a team, you will be able to bring out the best in terms of delivering revenue numbers. Your investors will be happy. Your investing team will be happy. Everyone relishes in the triumph!