When you’re evaluating a potential real estate syndication investment opportunity and weighing whether or not to invest, the investor webinar, when offered, can be one of the most valuable sources of insight into whether or not the deal will be a homerun or a total flop.
In this Ultimate Guide to Investor Webinars, we’ll discuss what to expect in an investor webinar, why they’re so valuable when considering whether to invest in a particular real estate syndication, when they generally take place, and questions you should ask. You’ll even find a handy worksheet that will help you gather your thoughts and questions beforehand.
So what are you waiting for? Let’s get to it!
What Is an Investor Webinar?
First, let’s start with the basics. An investor webinar is a conference call or online meeting that’s led by members of the sponsor team. Often, investor webinars take place through a platform like Zoom or Google Hangouts. Each sponsor has their own preferences.
The sponsors typically walk through the investment summary, highlighting things like the deal structure, business plan, market comps, and their own track record.
Note: Not all investment opportunities offer an investor webinar.
Just because an investment opportunity offers an investor webinar, doesn’t mean it’s automatically a homerun deal. And likewise, just because an investment opportunity doesn’t offer an investor webinar, doesn’t mean it’s a terrible investment.
In my experience, whenever possible, sponsors WANT to offer webinars, as they want investors to feel comfortable and confident in the deal and in the partnership. After all, most of these projects take place over multiple years, so better to get comfy with each other sooner rather than later.
Some sponsors offer a live webinar that’s also recorded and sent out to investors afterward. Others offer only a recorded webinar. Some webinars are led by one person. Others take on more of a panel format.
If you’re thinking about investing in a particular deal, the investor webinar is an incredibly valuable source of information. The sponsors will be the ones leading the entire project and handling the day-to-day operations, communications, and oversight, so the investor webinar is a fantastic opportunity to get to know them and how they work.
Why Investor Webinars Are So Valuable
When I was pregnant with my second child, my midwife recommended that I take a refresher childbirth class. Of the eight sets of parents at the class, we were the only ones who were second-time parents. And boy, did people glom on to our perspectives, birth story, and recommendations.
What was more surprising to me, was that I learned a lot from their questions and perspectives too.
I was reminded of what it was like to be a first-time mom – the terror of not knowing what childbirth would be like, all the questions about logistics, and the strategies for pain relief.
Overall, I came away grateful, humbled, and with renewed excitement for the new life we were about to bring into the world.
An investor webinar can offer that same sense of perspective, whether you’re a first-time investor, or whether you’ve invested with this same sponsor a dozen times before.
The investor webinar gives you a chance to hear directly from the sponsors themselves, as to why they chose this property, and what they believe the opportunity to be. It gives you a chance to ask your questions, and to hear how other investors are thinking about this opportunity.
When Investor Webinars Take Place
Typically, an investment opportunity opens up with a general “new deal” announcement. (Review the full real estate syndication investing process here.)
Usually, after the investment summary is made available for investors to review, the sponsors will offer an investor webinar.
Investor webinars are almost always recorded, so no worries if you’re not able to attend live.
Even though it’s not critical for you to attend the investor webinar live, it’s important to note that many investors rely on the investor webinar as the final lynchpin when deciding whether or not to invest in a deal. That’s because they want to hear about the deal directly from the sponsors who will be running the deal.
It’s not uncommon for an investment opportunity to fill up shortly after an investor webinar.
Given that most real estate syndication opportunities are on a first-come, first-served basis, be sure to reserve time to review the investor webinar recording as soon as possible if you’re unable to attend live.
Investor Webinar Frequently Asked Question Types
Ready to attend an investor webinar but not sure what questions to ask? Let’s look at some frequently asked question types, to get you off and running.
In the investor webinars I’ve attended, the majority of investor questions tend to fall into one of these five categories:
- Questions about things that are already in the investment summary
- Questions that ask what if
- Questions that ask why
- Questions about things you found through your own research
- Questions about logistics
#1 – Questions about things that are already in the investment summary
This is a fun one. It takes some courage to knowingly ask a question whose answer can be found in the investment summary. After all, doesn’t it just show that you didn’t fully read the investment summary?
Not necessarily. Sometimes I ask a question whose answer I already found in the investment summary, for the express reason of hearing the sponsor’s answer to it directly. I want to know how they’re thinking about that piece of the investment, and how they talk about it, not just what the technical answer is.
Example Investor Question
“What is the frequency of distributions?”
Investment Summary Answer
Quarterly, starting six months after closing
Sponsor Answer (based on an actual investor webinar)
“Great question. The distributions will be quarterly, starting six months after closing. This gives us time to stabilize the property and also gives us time to hit the renovations hard. We will have a catch-up on the preferred returns and anticipate that the preferred return will be shored up by the 18-month mark. I also wanted to reiterate that we don’t get paid an asset management fee unless the asset is doing well and is generating returns above eight percent. This ensures that our interests are aligned with yours.”
See? Simple question whose answer I could easily have looked up myself. But by having the guts to ask this question, I’ve learned how the sponsor is thinking about the distributions, their integrity, and the value they place on their relationship with investors.
More Example Investor Questions
What are the acquisition and asset management fees?
What’s the projected hold time?
What’s the renovation budget per unit?
Again, these are all questions you could find the answers to yourself, but by asking them directly to the sponsor, you’re able to learn not just what the answer is, but how the sponsor is answering it.
#2 – Questions that ask what if
I’m sure these are sponsors’ absolute favorite questions. Not. ?
These are questions that ensure that the sponsor has thought of multiple scenarios and has a variety of backup plans and exit strategies in place to protect your money and ensure the success of the investment.
- Example Investor Questions
- What if we had to foreclose on the property?
- What if we hit a downturn?
- What if vacancy hits twenty-five percent?
- What if renovations take longer than expected?
#3 – Questions that ask why
Ah yes. Every preschooler’s favorite question, and every parent’s nemesis.
Asking why allows you to think about the investment with wonder and curiosity, just as when a preschooler asks why the sky is blue. They know the sky is blue; they just want to know what makes it so.
The same can be true with any part of an investment summary. Maybe you know that the projected hold time is five years. But how did the sponsors come up with that timeline? Is it just the default timeline they use with all their projects? Are they building in a buffer to let the asset appreciate?
Asking a why question will allow the sponsor to address the reasoning behind the choices they made, and why the investment is structured as it is. Good sponsors will answer why questions with patience and confidence. Any signs of defensiveness, and you should put up a red flag.
Example Investor Questions
- Why is the exit cap rate projected to be 5.5 percent?
- Why is the first-year return significantly lower than subsequent years?
- Why is the plan only to renovate 75 percent of the units?
#4 – Questions about things you found through your own research
During your own due diligence, you’ll likely surface some information about the property or the market that’s not included in the investment summary. This might be through Google searches, Yelp reviews, or your personal experience with the market.
Regardless, the investor webinar is a great opportunity for you to share the insights you’ve gained and to see whether the sponsor is already thinking about those things, or whether you’re able to contribute new information.
Example Investor Questions
- I saw that there’s a potential new development going in across the street from this property. How will that impact the investment?
- According to reviews of the property, lots of previous tenants have complained about poor external lighting. What’s your plan to address these complaints and improve the safety of the community?
- From Google Maps, it looks like the roof on one building is older than the others. Have you found that to be the case through your due diligence? And if so, are there plans to replace it?
#5 – Questions about logistics
These are questions about all the little things that are on your mind. You may be well aware that the property is in a great submarket and that the sponsors have a terrific track record, but how exactly will you receive your distribution checks? When will the PPM (private placement memorandum) be available for you to review?
I know it can be intimidating to ask a seemingly small question like this in an investor webinar, but chances are, if you’re wondering about it, someone else is too.
Questions like this may be simple for the sponsor to answer, but remember, it’s not what they say but how they say it. This will clue you in to the kind of partner they’ll be throughout the project lifecycle.
Example Investor Questions
- When is the target close date?
- Are you investing in this opportunity personally?
- What communications should I expect before and after the property closes?
- Can I send in a check, rather than wire in my money?
Plan Ahead
If at all possible, take some time before the investor webinar to brainstorm some questions you may want to ask. As the webinar proceeds, some of these questions may get answered, and others may get asked by other investors, so you can cross those off your list.
To organize your questions, download this Investor Webinar Notes worksheet, so you can collect your thoughts and questions before the webinar begins.
Summary
If you haven’t picked up on it by now, I’m a huge proponent of investor webinars. They open up the lines of communication between sponsors and investors and allow everyone to get to know each other better and build the foundation of a potential long-term relationship together.
Whether you go to an investor webinar just to listen or can’t wait to get your burning questions answered, you’ll likely gain a ton of valuable insights and perspectives from both the sponsor overview, as well as the questions that other investors ask.
When thinking critically about the deal and trying to come up with some questions to ask during an investor webinar, remember to consider the five most frequently asked question types:
- Questions about things that are already in the investment summary
- Questions that ask what if
- Questions that ask why
- Questions about things you found through your own research
- Questions about logistics
You know what they say – there’s no such thing as a dumb question. This is especially true when it comes to making a potentially sizable investment. So be sure to prioritize the investor webinar, attend with an open mind, and pay attention not just to what the sponsors are saying but how they’re saying them.
If you’re interested in checking out some sample investment webinars from some of our previous closed deals, reach out to us directly at [email protected].
