investment property

The 7 Keys to Passive Investing Pt. 2: Track Record

Learn the Next Key that Leads Toward Success in Kansas City Real Estate

Now that you have a better understanding of what trust means when investing in multifamily real estate, let’s continue on. Track record is the next key to successful passive investing. Remember, however, that trust is something you should refer to along with each following key. When these keys were created by Worcester Investments, we imagined trust following the whole way. When you start to consider a firm’s track record, remember to look for signs of trust here as well.

Recap: Covering the Basics of Passive Investing

A multifamily investment company creates a real estate fund. That fund is increased by the contributions of accredited investors. The fund is used to purchase and reposition investment properties. As the properties perform well, investors could potentially receive a high return on investment. This process is called passive investing because the investor puts their trust in the firm to generate revenue with their investment.

Worcester Investments is a multifamily investment company with expertise in Kansas City real estate. Our fund is made up of multifamily properties. Remember that multifamily properties are those with multiple units, such as an apartment building. When our properties bring back returns from occupancy fees and the sale of the building, we gain revenue. These returns are immediately routed to our accredited investors. Most accredited investors are looking for high returns on investment. This happens when you earn back much more than you invested.

Recap: Why Does Trust Matter in Passive Investing

As we mentioned in our last post, trust is important in multifamily investment. A company should give you a positive feeling in your gut. It is important to trust your instincts because a significant portion of business is being able to feel good about who you are working with. However, you shouldn’t only go with instincts. You should also look at the company’s data. A multifamily investment company should be able to explain the numbers behind claims of high returns on investment. They should be able to prove their worth in the Kansas City real estate market. Their investment properties should be performing well, and you should know this because of the numbers. You shouldn’t just go by what the team claims. Accredited investors should be wary of firms that can’t back up their claims. However, they should be excited about firms that “feel right” to them, and have the data to back up that feeling.

Introduction to Track Record, the Second Key to Passive Investing

Let’s move on to track record. Keeping in mind that we will keep trust alongside us, let’s think of track record on its own. When you schedule a call with our Investor Success team, we are here to serve you. We can answer any question you throw at us, from high-level investment conversation to simply sharing our story. Additionally, you can share whatever you’d like with us. We love to hear about your goals for your financial future. This is important to us because we want to be good stewards for your investment. Our accredited investors come to us because they are proud of what they’ve built. They want to continue building that legacy for others. Therefore, at our multifamily investment company we are an open book.

While it may seem like we’re describing trust, we mention all of this because we are open to talking about it all. While this means discussing anything you need to know – when the time comes – we should get down to numbers. We would be thrilled to show you a portfolio of our work. We’d love to share all our numbers, including our historically-high returns on investment. We are proud of our investment properties. We are also proud of our work in Kansas City real estate. Essentially, we want everything laid out before you, so you can make an informed decision.

Getting Deeper into Track Record, the Second Key to Passive Investing

Every multifamily investment company should provide what you’re asking for. When dealing with passive investment, this is your right. Ask for a portfolio. Ask for a presentation. Look at the numbers. In particular, look at the sponsor’s projections in relation to how the property performed. This will tell you a lot. It will let you know if the investment property was a good deal for the firm. It will also tell you how realistic the firm is. You want to see a multifamily investment company underpromise and overdeliver. That kind of track record should be exciting to any accredited investor getting into passive investing.

Additionally, you want to look at the gap between what investment property is being bought and what the firm’s plans for it are. Here’s a prime example. If a multifamily investment company is buying class D assets and building class A construction, that spells trouble. Why? Because that poses a large risk. You don’t want the firm to spend top-end money on a property that has performed so poorly. While successes like these can take place, it is better to work with a company that makes more calculated risks. You want historically-high returns on investment, but not wild risk that sometimes pays off. Passive investing should feel like a stable choice.

Questions You Can Ask About a Firm’s Track Record for Success with Passive Investing

When you’re seeking a sponsor, and they’ve already passed your trust criteria, here are questions you can ask about track record:

  • What data can the multifamily investment company share with you?
  • Do they overpromise and underdeliver? Look at the numbers.
  • What investment properties deals is the sponsor currently pursuing?
  • How does their track record compare to what they are currently investing in? Are they suddenly taking big swings?
  • How successful has their history of investing been?
  • Is there a significant gap between what was projected and how the investment performed?
  • Are they offering historically-high returns on investment?

These are questions that will help you determine the sponsor firm’s track record and continue to help you establish trust with them. These are questions you can ask of Worcester Investments about passive investing. As a multifamily investment company committed to providing accredited investors with success, we will answer these questions honestly. We think you’ll be pleased with our work in Kansas City real estate. Our investment properties have done well, and have satisfied our clients.

Learn more about our track record by contacting us here. Or, give us a call at (816) 759-0901 to set up an appointment with our Investor Success team.