Liftoff is almost complete, and you’re almost in orbit! Just a few things left to do. You’re collecting money from your investors right now, and now it’s time to finish it up, making the process complete. Just what are those last minute things that you need to do in order to be in orbit comfortably?
The first thing we need to do is keep an eye on money coming in and making sure that everybody’s money is there, before the deadline. There are typically a few really urgent things that are left to do in the final days – it rarely runs perfectly smoothly. If you’re still missing funds from an investor, it’s time to track them down.
Keep an eye on those wires, and you should be talking to the bank regularly. It’s always recommended to take wires over checks, to ensure there are no reversals later on. There’s no backtracking on wires, plus there’s a huge amount of security put in place for the person sending the wire.
Tell your investors to call you from the bank when they’re going to wire you the money, and have the banker verify that all your routing information is correct. Don’t be at risk of wiring interruptions and losing millions. QuickBooks and other software also helps you keep track of your expenses and stay organized.
As soon as you close, have the conversation with your investors letting them know and congratulating everyone on the deal. Then, be totally ready for onboarding with property management. If you’re the property manager, make sure that everything is ready for notifying tenants, accounts are all set up, utilities are ready to be switched over, etc.
When it comes to tenants, there may not have been proper pass throughs. If you’re buying in a location to where any kind of sale affects the assessed value of the property and property taxes are going up, and tenants are responsible for paying for that, they’re going to be hit with more expenses. And chances are they might freak out. In this case, don’t be overly aggressive on these tenants unless you want to drive them out anyway, if that’s your plan. But remember that the lease is the lease. Those are the rules of the road. So be mindful that this is a major change for their business or their home. Be ready for challenges that come up with tenants, and invite reasonable dialogue with them to set you off on the right foot.
The number one job of a property manager or an asset manager (like a syndicator) is risk control. You want to understand risk and control risk. How tenants are feeling is always a risk inherent in real estate, so just be mindful of it.
With that, you are going to close this property, start having that income, and start earning that reputation as a great syndicator! Congratulations. You’ve lifted off and you’re now in orbit.
Are you ready to get started with your own syndication and need a private placement memorandum? Moschetti Law Group is a real estate syndication law firm and we’d be happy to meet with you to put together your Reg D PPM from a syndication attorney and guide you through the process of launching your own offering.
You Are Here: Finishing the Acquisition
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