Should a first-time syndicator write updates themselves or hand it off right away?

Question

I'm closing a small deal with 11 investors, mostly people who know me. Somebody who does IR work for two sponsors offered to take over quarterly updates for a monthly fee, and I can't decide.

Case for doing it myself: the investors gave money to me, not to a service. I know what happened at the property because I was there. And writing it forces me to actually look at the numbers instead of skimming a summary.

Case for handing it off: I'm bad at it. My first update took six hours and read like a text message. Somebody who does this every week has a format, knows what LPs actually ask about, and won't miss a quarter because I'm in the middle of a roof bid. Missing a quarter is worse than a mediocre update.

With 11 people it's maybe manageable. I don't know where the number is that flips it.

mikeoconnell7 · Answer

The thing people get wrong is treating it as one job. There's the writing, and there's the assembling. Pulling the rent roll, the trailing twelve, the capex actuals, checking the distribution list is current, that's the part that eats six hours and it's the part somebody else can do. Then you write three paragraphs of what it means on top of their draft. At 11 investors I'd keep the writing and dump the assembly.

derekj19 · Answer

I've been looking at this side of the business and the pattern I see is that sponsors don't outsource until something breaks. Usually a quarter gets skipped during a refinance and two LPs email asking if the deal is fine. That's the moment. Not a headcount number.

@flint six hours for a first update isn't bad, by the way. The second one takes two because you built the template.

laurenkim53 · Answer

11 people who know you personally is a different animal than 11 strangers off a webinar. I'd call all 11 and skip the pretty document for a while.

Should a first-time syndicator write updates themselves or hand it off right away?

3 replies