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Chapter 1

1 ch When it comes to managing real estate investments, you cannot truly survive all on your own. Networking and building relationships are as much a part of it as ensuring that your products or services sell.

For example, take your financial relationship with your investors; the deals you strike with them are never truly done. The moment an investor says ‘YES’ to your offering does not mean it’s the end of your business arrangement. In fact, you will need them in your future real estate investments, both as returning investors and as networking partners. If everything goes as planned, you’ll be connected with other investors for other potential projects in the near future.

So, other than financial backing, investors can offer unparalleled business insights — based on their experiences — and resources that can help you ensure that your brand name, and your firm’s reputation in the industry are on the right track.

How Can We Define the Financial Relationship Between GPs and LPs?

With real estate investments, the financial relationship between General Partners (GPs) and Limited Partners (LPs) is vital for success.

As a general rule, your investors are first, and foremost, here to make high yields on their invested funds. It means, the baseline of your relationship is financially based, and therefore can be categorized as a financial relationship. Every dollar invested in your portfolio from your investors pocket needs to be calculated, planned and presented to them with full transparency. Where financials talk, be financially oriented, and make sure that your investors are always in the loop. It’s your responsibility to invest the committed capital in the right deals, manage the portfolio of investments, and aim to complete the investments with a sizable return of capital.

Keeping that financial relationship baseline in mind can be a great motivator for investors to trust you and for them to want to reinvest in another deal or recommend you to their investor network.

When it comes to managing real estate investments, you cannot truly survive all on your own. Networking and building relationships are as much a part of it as ensuring that your products or services sell.

For example, take your financial relationship with your investors; the deals you strike with them are never truly done. The moment an investor says ‘YES’ to your offering does not mean it’s the end of your business arrangement. In fact, you will need them in your future real estate investments, both as returning investors and as networking partners. If everything goes as planned, you’ll be connected with other investors for other potential projects in the near future.

So, other than financial backing, investors can offer unparalleled business insights — based on their experiences — and resources that can help you ensure that your brand name, and your firm’s reputation in the industry are on the right track.

How Can We Define the Financial Relationship Between GPs and LPs?

With real estate investments, the financial relationship between General Partners (GPs) and Limited Partners (LPs) is vital for success.

As a general rule, your investors are first, and foremost, here to make high yields on their invested funds. It means, the baseline of your relationship is financially based, and therefore can be categorized as a financial relationship. Every dollar invested in your portfolio from your investors pocket needs to be calculated, planned and presented to them with full transparency. Where financials talk, be financially oriented, and make sure that your investors are always in the loop. It’s your responsibility to invest the committed capital in the right deals, manage the portfolio of investments, and aim to complete the investments with a sizable return of capital.

Keeping that financial relationship baseline in mind can be a great motivator for investors to trust you and for them to want to reinvest in another deal or recommend you to their investor network.

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