As a fellow sponsor, I used to rely on traditional capital-raising methods, too. Curating a list of investors, calling, emailing, adjusting meetings, traveling halfway across the city, pretty much trying to fit in as many appointments in a day as possible. Sounds relatable, right?

So, with traditional fundraising methods being a hit or miss, sponsors need more efficient ways to raise capital. That’s where a real estate fundraising software comes into action. This digital platform utilizes advanced automation to streamline the capital raising process and expedites deal execution.

Let’s understand how that’s done and explore how sponsors can raise capital faster, one automation feature at a time.

The Challenges of Traditional Capital Raising

While traditional methods have their place, raising capital for real estate syndications through these channels is a slow and laborious process. This hinders your ability to capitalize on hot deals. Here's why:

Time-Consuming Manual Work

The traditional approach relies heavily on manual processes. This involves one-on-one meetings, phone calls, and physical mailings to find and connect with potential investors. These methods are incredibly time-consuming, limiting the number of investors you can reach. As a result, it hinders your ability to raise capital quickly.

Limited Reach

In my earliest syndication deals, I relied too much on personal networks and wanted to look for investors nearby. This resulted in extreme geographical limitations. When you rely on traditional meetings, it becomes difficult to connect with a diverse pool of qualified investors outside your immediate circle. This restricts the amount of capital you can raise and limits the quality of investors in your syndication.

Slow Communication and Tracking

Traditional methods often involve cumbersome communication and tracking processes. Voicemails, missed calls, alternate numbers, messaging, I have done it all. After a while, it started to seem like a chase with no end in sight. Also, following up with potential investors, managing paperwork, and tracking progress can be error-prone. In a fast-paced market, delays in communication can cause you to miss out on deals or lose investor interest.

Leveraging Automation for Real Estate Fundraising - The SponsorCloud Way

To all the problems with traditional methods, the solution was simple - utilizing a real estate syndication software. In the era of digitisation, this software is the only package you will need. SyndicationPro was built with these challenges in mind.

The software is powered by advanced automation to streamline the entire capital-raising process. From reaching out to potential investors to onboarding them and signing the deal, the software digitizes the entire process, even the signatures.

Here’s why SyndicationPro is the perfect fit for raising capital faster:

Automated Get-to-Know-Your-Investor Process: Potential investors can easily create their user registration on your custom-branded website, which is integrated with the SyndicationPro CRM platform. They can sign up and submit customizable investor questionnaires. This helps you understand their preference, background, and risk tolerance.
Customizable Fundraising Workflows: With a centralized fundraising workflow platform, you can view which investors are most serious about the deal and move them along the capital raising funnel. This helps you to close deals faster.
Automated Investor Communications: SyndicationPro CRM platform provides features like two-way email sync, mass email sending, segmentation of contacts, unified view of all investor relations, and more. This makes it easy to reach potential investors remotely and communicate with them wherever they might be.
Simplified Investor and Investment Management: Consolidate all your investor data in one place. Store contact information, investment details, communication history, and preferences within a centralized CRM. This gives you a comprehensive view of your investor network and allows you to personalize interactions effectively.

What to Do For Attracting Investors?

So you are on board with utilizing the software, but how do you attract potential investors? Here’s my plan:

Building Relationships with Investors

Start with your existing network. Reach out to them to elaborate on your proposal. Since you already know your target investors, ensure you have a pitch that will turn their heads.

For this, you can send out emails with details about your syndication deal, host webinars, and attend industry events. Create a sense of community among your investors by hosting networking events or online forums. Encourage interaction between investors, fostering a sense of shared purpose and collaboration.

Ensure you provide them value. Include the perks of your deal, along with transparency about the risks involved. The trick is to instill confidence that you know your game. When investors trust you, they are automatically drawn to trust in your real estate venture.

Pro tip: Integrate the real estate syndication management software with your website. Utilize customizable investor forms, user registration and investor portal to share with your potential investors. This will ensure that they are notified promptly about the various aspects of your deal and they can choose to invest directly on the platform.

Attracting Potential Investors Through Digital Channels

This digital age is a boon! The internet provides a powerful platform to connect with a wider pool of potential investors for your real estate syndications. Here’s how you can reach them:

1. Content Marketing:

Establish Yourself as an Authority: Create valuable and informative content related to real estate syndications, market trends, and investment strategies. Publish blog posts, articles, or infographics on your website or social media platforms. Your years of experience pay off here.
Targeted Content for Different Investor Profiles: Cater your content to address the specific interests and concerns of different investor profiles. This demonstrates your understanding of their needs and positions you as a trusted advisor.
Leverage Video Marketing: Consider creating educational videos or investor testimonials to showcase your expertise and the potential benefits of your syndications.

2. Social Media Engagement:

Build Your Online Presence: Develop a strong presence on relevant social media platforms like LinkedIn or Twitter. Engage with industry leaders, potential investors, and other real estate professionals.
Join Online Communities: Participate in online forums and groups focused on real estate investing. Share your insights, answer questions, and build relationships with potential investors in these communities.
Targeted Social Media Ads: Leverage social media advertising platforms to reach a specific audience based on demographics, interests, and investment criteria.

3. Investor Landing Pages and Email Marketing:

Capture Leads and Nurture Relationships: Create dedicated landing pages on your website that capture investor contact information in exchange for valuable content like white papers or webinars.
Targeted Email Campaigns: Develop targeted email campaigns to nurture leads, educate them about your investment opportunities, and keep them informed about upcoming deals. SyndicationPro streamlines the email marketing process like never before.
Create Weekly or Monthly Investor Newsletter: Publish a regular investor newsletter to share market insights, deal updates, and performance reports, fostering ongoing communication and engagement.

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Automating Soft Commitments

Soft commitments help with those initial expressions of interest from potential investors in your real estate syndication deal. These are crucial for gauging investor appetite and informing your fundraising strategy.

With investor questionnaires, you can derive the amount they want to commit to. Soft commitments make it possible to foresee the future of your deal.

For example, let’s say you are looking to raise $300,000, and so far, only 15 investors have made soft commitments. Here, let’s assume that, on an average, every investor is committing $15,000. This means you have reached a goal of $2,25,000 in soft commitments.

Now, you know that you need to attract more investors to reach the total of $300,000. This will help you plan ahead and deploy strategies to meet your capital requirements.

In SyndicationPro, you can use the reservations module to showcase your upcoming deals and secure soft commitments within the platform.

Listen to this podcast to understand the technology advancements in Real Estate Syndication:

Tech Advances in Real Estate Syndication with TJ Lokbok

Begin Raising Capital: Investors Funding Investments via ACH Payments

Now that you have used automation to attract and retain investors, it’s time to start accepting payments. Let the fun begin.

Traditionally, collecting investor funds for real estate syndications involved checks, wires, or other manual methods. This led to delays and administrative burdens. Thankfully, technology offers a faster and more efficient solution: ACH payments.

So, SyndicationPro has integrated ACH payments into the platform. Once you have set up your sponsor account with us (and followed all the steps above), you can provide a secure payment gateway to let investors transfer the funds digitally.

Click here for your company portal

Why ACH?

Sponsors reported huge time savings since they no longer had to deal with sharing wiring instructions, confirming details over the phone, or dealing with incoming paper checks. The ACH process also provides more security for investors and eliminates the risk of wire fraud.

Unlike checks that can take days to clear, ACH payments electronically transfer funds directly between bank accounts, significantly accelerating the investment process. This allows you to close deals faster and deploy capital sooner.

Note: ACH payments provide a convenient and user-friendly way for investors to contribute to your deal. They can securely submit their bank account information and complete transactions electronically, eliminating the hassle of paper checks or wire transfers.

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Conclusion

Raising capital for your real estate syndication doesn't have to be a marathon. By implementing the strategies outlined in this guide, you can transform your fundraising process from a slow and cumbersome endeavor into a quick and efficient operation.

At the core of it all lies automation. And what better way than to let a real estate syndication software do the heavy lifting for you? Utilize software like SyndicationPro to streamline capital-raising processes, expedite deal execution, and achieve your syndication goals.

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