Fundraising is a vital process in real estate — a requirement in reaching investment goals. You can quickly settle the upfront costs (i.e., acquisition, listing, etc.) and start earning from an investment by accelerating real estate fundraising.
Private equity remains the largest representation (estimated at 75%) of private markets, with the fastest growth at 9.1% per annum. The challenge lies in reaching out to private investors for that much-needed capital access.
Best ways to accelerate fundraising
Each investor has a unique set of preferences and guidelines, but generally, experienced real estate sellers have a higher chance of leaving a favorable impression due to their record of successful deals. However, the main driving force lies in understanding what investors want and meeting them, which accelerates fundraising.
1. Assess the costs involved
The first step of accelerated fundraising involves a thorough assessment of the cost involved in each real estate investment. By clarifying the amount, you can break down the required fees that determine a realistic fundraising strategy. You will need to carefully consider legal costs and other hidden fees or risk losing support from prospective investors.
2. Tap into personal funds
Using your own capital (i.e., commingling funds) reduces the borrowed amount, making it easier to secure a deal with investors. Additionally, the supplementation minimizes the interest rate of your loans. Budget evaluations and expenditure cuts can help you set aside additional disposable income each month to fine-tune the process.
3. Foster trust
Private investors seek trust. There are many ways to earn their confidence by spreading the word about your successful past investments. Social media networks and real estate forums are popular outlets to build a following and precious credibility.
An official website with user-friendly software solutions can also do wonders for your professionalism and win the trust of investors by establishing your position as an innovator within the industry.
Essentially, deal visibility is a crucial aspect of fundraising. Investors wish to monitor the progress of their investments, and a transparent platform will help present the data. You can easily make all information easily available by using an investor relationship management software, and and an investor portal. Learn more about investor portal software pricing.
4. Publish the offering online
Publishing a fundraising offering online adds further visibility to the investment. Through a one-stop site, investors can view insightful documents (i.e., prospectus) that offer a clearer perspective of investment goals.
5. Experience and due diligence
Accumulated real estate experience will greatly attract lending parties. Proven achievements provide investors with greater trust in your abilities to protect their interests and maximize profits. For less experienced real estate professionals, it pays to research more about an investment and the specific priorities of preferred investors.
As a rule of thumb, you should have answers prepared for the common concerns in the fundraising process. Always be upfront with investors, sharing the potential returns and the true cost required to achieve targets to prevent disappointments and disagreements down the road.
Benefits of accelerated real estate fundraising
Accelerated real estate fundraising helps property dealers gain investors trust through a systematic process that enables them to gain more capital with less time. The benefits include:
- Increasing investor retention: Accelerated real estate funding optimizes current investor subscriptions, allowing real estate professionals to seek new deals with peace of mind.
- Providing GPs (general partners) with improved growth for their investments by securing trust from investors with improved efficiency. GP stake investors typically seek to achieve an 8%–15% annual cash yield. Accelerated fundraising will help stakeholders optimize asset selections.
A reliable investor management software can help you achieve and keep track of accelerated fundraising, eliminate manual oversights, and maintain lasting relationships with investors for profitable outcomes.
Leveraging technology in fundraising
Agora’s real-estate investment management platform can help you accelerate fundraising with a systematic and consistent solution.
Through a few easy steps, you can start reaching out to investors and managing collaborations from the convenience of a single portal. An intuitive dashboard presents the total capital raised for each project to streamline fundraising efforts and planning.
Additionally, you will have the tools to automate the creation of official agreements and sending them out for e-signatures , significantly reducing processing/closing time. With the signatures in place, you can conveniently invite investors to your offering for a clear presentation of your deal.
Agora’s prospect pipeline gives you the transparency and convenience of tracking investments across varying stages. A prospect pipeline provides similar advantages as conventional sales pipelines. Studies have shown a strong correlation between effective pipelines and revenue growth — 15%–28% increase for companies grossing $250 million $1 billion.
Upon registering a prospect into the Agora database, you can begin submitting documents to investors with one click that expedites the fundraising process. Additionally, Agora has full ISO compliance, maintaining the most secure data management practices throughout your fundraising journey.
Speak to the Agora team for a demo, and experience the advantages of the world’s most advanced investment management software. Grow your EUM with accelerated fundraising today!
