property and real estate investment

The 7 Keys to Passive Investing Pt. 1: Trust

Why This Important Factor Matters When Working with a Multifamily Investment Company

In this series on The Seven Keys to Passive Investing, we’ll explore the considerations you should make as an accredited investor. Investing in a multifamily investment company to potentially earn high returns on investment is an important decision. You’ve worked very hard to grow your finances for your family, and you want to see your investments succeed. You want to be able to provide generational wealth for your children, grandchildren, and beyond.

The first of these considerations you need to make is trust. In this feature article, we’ll explain why trust matters when working with a multifamily investment company. First, however, let’s refresh our memories on the basics of passive investing in Kansas City real estate. This way, you can stay informed on what our investment properties have to offer while also learning the seven keys.

What is Passive Investing?

Passive investing means that you’ve found a sponsor to work with, such as a multifamily investment firm. You expect this sponsor to manage your contribution for potentially high returns on investment. Therefore, the sponsor firm does the work, while you get to experience the fruits of their labor. This is why this kind of investing is called “passive.” However, passive investing is an active process.

You want to be sure that you’re investing with the right firm. It is important that you do your research to make sure you’re investing with a firm you trust. Worcester Investments represents such a firm, if you’re looking to invest in Kansas City real estate. If you’re an accredited investor we can help you invest passively in our real estate fund of high-quality investment properties.

What Does It Mean to Passively Invest in a Multifamily Investment Real Estate Fund?

When you decide to passively invest with a multifamily investment company, you are aligning your money with a pool of investors. This is called a fund. A fund is used for the purchase of multifamily properties. Multifamily properties are properties with multiple dwellings, such as apartments. A firm like Worcester Investments transforms and repositions these investment properties. We do this primarily in the Kansas City real estate market. Then, the properties tend to thrive and create potentially high returns on investment. These returns come from occupancy fees or the eventual sale of the property. If you are an accredited investor, you can invest in this kind of fund.

What is an Accredited Investor for Passive Investment?

An accredited investor is an investor who meets certain requirements. These requirements are laid out by the U.S. Securities and Exchange Commission. If you have a certain net worth or income, for example, you may be considered an accredited investor.

The best way to know for sure is to get in touch with our Investor Success team. This team can help determine the best investment strategy for you. We can explain our offerings in the Kansas City real estate market and share exciting news about our investment properties. As a multifamily investment company, this is our goal. Besides hoping to provide potential high returns on investment, we develop relationships. This is where trust comes in.

First Key in the 7 Keys for Passive Investing: Why Does Trust Matter?

Trust is the first key to passive investing. But before we explain, what do we mean by trust? Trust, of course, means the way you instinctively feel with a sponsor you are vetting. It also means how you understand the hard data in relation to what the sponsor is claiming.

First, trust means that you use your gut as an accredited investor, and feel either positively or negatively. When you meet a multifamily investment company you can get a read on them. You’ll share with each other. They will ask you about your goals. Then, they will explain their approach to Kansas City real estate. Additionally, the team will share about their investment properties. During this conversation, you should trust your instincts. This is something you can rely on. Oftentimes, investors start to feel that something is amiss. Therefore, they should go with a company like Worcester Investment, which works hard to establish trust.

At the data level, there should also be trust. A sponsor will explain the multifamily investment process that they use to invest. There should be hard numbers. There should be statistics. In short, there should be evidence that the company is doing what it claims. If there isn’t trust in this regard, this isn’t a relationship you should pursue. It should be clear that if the company says they’ve seen historically-high returns on investment, they can back this up. They should be able to provide evidence. If not, this is a good time to seek other opportunities for passive investing.

This First Key, Trust, is the Entry to the Funnel of Passive Investing

Because this is the first key, if you can’t establish trust, it is time to move on. If the multifamily investment company you are working with doesn’t seem trustworthy, reconsider. When they talk about Kansas City real estate, you should feel something. When they describe their approach to investment properties your gut will register one way or the other. Additionally, the numbers should support their claims. Don’t hesitate to ask for them. You should be able to get a clear picture of how you can benefit as an accredited investor. You want to be wary of a sponsor who calls themselves a race car while you’re sitting in a jalopy. This is not how trust works.

Because The Seven Keys of Passive Investing approach operates like a funnel, this is an early touch-point in the process of investing. This means that if you don’t notice trust right away you can move on. Remember, you’re looking for high returns on investment, so this is your call and your investment.

You Can Always Return to the First Key of Passive Investing

Although we’ve described the Seven Keys as a funnel, trust should be continually evaluated. Even though most relationships begin with trust, continue to refer to this key. For example, if you move on to the second key, track record, and something seems off, you can always duck out.

Here are some questions you can ask yourself. These will help you determine trust right away when working with a multifamily investment company. You’ll have a good sense of whether you want to move forward.

  • Is the multifamily investment company promising too much, too soon?
  • Do they seem trustworthy?
  • Are there any red flags for you as an accredited investor?
  • Does their data align with their words?
  • Do they have credibility in the Kansas City real estate industry?
  • Do I like this sponsor?

We hope you can answer these questions positively when you meet with us. We hope that trust will register with you. Our approach to Kansas City real estate is second-to-none. Our investment properties have yielded historically-high returns on investment. We want our accredited investors to feel secure with us. Then, our goal is to ensure our fund performs well for them.

Find out how our investment properties can benefit you by getting in touch with us here. Or, give us a call at (816) 759-0901 to set up an appointment with our Investor Success team.