September 13, 2019

JF1836: Syndication Tips #3 Providing Feedback On A Live Deal | Syndication School with Theo Hicks

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Theo is reviewing an offering that someone sent us, asking for feedback. We’ll hear what he did great, and maybe what could have been better. A recurring theme in Syndication School and on this podcast in general, is learning from others, and incorporating the lessons they have learned into your life and business. That is exactly what we are doing today by reviewing this persons offering. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!

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“You want to make the email with the expectations that the majority of investors are not going to read through the whole thing”

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Joe Fairless: There needed to be a resource on apartment syndication that not only talked about each aspect of the syndication process, but how to actually do each of the things, and go into it in detail… And we thought “Hey, why not make it free, too?” That’s why we launched Syndication School.

Theo Hicks will go through a particular aspect of apartment syndication on today’s episode, and get into the details of how to do that particular thing. Enjoy this episode, and for more on apartment syndication and how to do things, go to, or to learn more about the Apartment Syndication School, go to, so you can listen to all the previous episodes.


Theo Hicks: Hi, Best Ever listeners. Welcome to another episode of the Syndication School series, a free resource focused on the how-to’s of apartment syndication. As always, I am your host, Theo Hicks.

Each week – every Wednesday and Thursday – we release two episodes; those can be found on our podcast, as well as our YouTube channel. They go over a specific aspect of the apartment syndication investment strategy. For the majority of these episodes we offer a resource, whether it’s a PDF document, a PowerPoint presentation template, Excel template – some sort of resource for you to download for free. All of the past Syndication School episodes, as well as free documents, can be found at

In this episode we’re going to do something new. Someone – an aspiring apartment syndicator – sent us a new investment offering email that they created for a deal they are currently looking at. They asked us to provide them with a feedback – positive and negative  – about the email, so that they can improve, optimize their email moving forward. And rather than  talk with this individual on the phone or send them back an email with my notes, I thought it would be good to actually go over this feedback (partially live) on the Syndication School series, because this is something that we’ve actually recently gone over in series number 18, where we discussed how you want to secure commitments from your passive investors… And one of those steps is to create the new investment offering email.

So after you have the deal under contract, you create your detailed investment summary presentation, which you can download for free at, or in series number 18. Then based on that investment summary, you want to distill all of the important information into one simple email that you can then send out to your list of passive investors, so they have all the pertinent information of that deal, so that they can not necessarily decide whether to invest or not, which of course that might happen, but they know if they want to move on to the next step, which is to go to the new investment offering conference call, where you (the syndicator) will go over the details of your email, as well as the details of your investment summary in more detail.

So this email was sent to us by Alex. He is an apartment syndicator. I’m not 100% sure if they actually have this deal under contract, but I think they do, because it’s an off-market deal… And he effectively sent us his new investment offering email that he has and asked us to review it and let him know if we have any feedback of things that are good and things that need to be changed.

What I’m going to do is I’m going to read through this email, I’m going to describe the aesthetics of it as much as possible, just because I want to keep Alex’s contact information and this deal obviously confidential… So I’m not going to say the name of the deal, the address, any specifics of the actual deal, but I’m going to read what is said in the email and then provide my feedback, based on my experience creating a ton of these new investment offering emails. Let’s jump right into it.

The first thing that I see is the image at the top of the email. It is an image which like it is — it’s basically a blown-up logo of the  actual current property, and the property name. So the property name is on there, and then the description is X Unit Multifamily Investment Opportunity, the name of the property, and then the address of the property.

One thing that’s great is that you have a picture; it’s not all just words. But my first feedback just based on this is two things. Number one, rather than having just the logo of the property, I would have your company logo instead. We put our company logo at the bottom right-hand corner of the picture. So if you’re watching on the video, it would be right here. And then the overall picture is actually a collage of pictures of the property.

So the top picture will be maybe the monument sign, or maybe the picture of the clubhouse… Typically it will be the monument sign, because that’s where you wanna have the name of the property; so rather than putting the logo of the property on the bottom right-hand corner (I keep getting them mixed up on the camera, if you’re watching  you put your company logo there instead, and then the name of the property is actually at the top, in the picture, on the monument sign.

Then below that we have three different smaller pictures that highlight other aspects of the property. So whether it’s a fitness center, a pool, and the clubhouse. Or a model unit, the playground, and some sort of barbecue area.

When I’m looking at this picture, it’s not really sticking out to me, it’s not really showing me what this property looks like. So at this point all I have are words of the property; but personally – and I’m sure other investors will say the same – if I actually see the property, I see how nice it looks, I see what I’m investing in, I’m more likely to invest.

And then the second thing is the title. I’m not sure if the title of the email is “X Unit Multifamily investment opportunity”, the name and the address. But since it’s in this image, I’m assuming that it is… And you want to make a more attractive title than that, because that’s not really telling me much about the investment opportunity from a financial perspective, or why I should invest. All you’re telling me is the number of units, and that it’s a multifamily, and that it’s an opportunity. So you wanna be more specific, at least mentioning one or two of the main highlights of the deal.

I’ve already read through this email, so at this point I can say that you wanna include something about it being an off market opportunity, and then you could also mention something about the market that it’s in, because according to your email, the neighborhood in which the investment opportunity is located in is highly desirable.

So at the very least you wanna say that it’s an off market opportunity, but I’d also say something about the market or some other highlight of the deal. Maybe as I read through it again I can come up with an actual specific title by the end of this episode, but don’t hold me to that.

So those are my first two pieces of feedback, just by looking at the pictures. Number 1.a) is to put a picture of the actual property, and 1.b) is to put your company logo rather than the deal logo, because you might change the name of the property anyways. And then number two is to have a better subject line for the deal. At the very least saying it’s an off market, X unit multifamily opportunity, but even better would be “Off market deal located in highly desirable submarket.”

Okay, so now to the body of the email… Again, I’m gonna say a  lot of X, because I don’t wanna say the name of the property; or subject property. So subject property is under contract on an off market basis, with a private seller, to acquire *address* an X-unit, two-story garden-style apartment building located within the flourishing *submarket* or *blank* Texas.

So right off the bat you’re telling them that it’s an off market deal, which is great. I don’t wanna get too much in the weeds, but — I don’t want to, but I’m going to… So this looks like something that you see in a PSA, a contract, because it has the property address, and then in parentheses the quotation property. You don’t need to put the address in there; you already have the address in the title, and the address isn’t something that’s super-important. They can look up the address by looking at the investment summary… So it’s just not something that you want to put in the first sentence.

I should be able to read the first sentence and know “Do I want to invest in this deal or not?” And right now you’ve done a good job of saying it’s an off market deal, you’ve done a good job of saying it’s in a flourishing submarket, but you’ve kind of added in the middle there information about the address and the property description, which is not very relevant to me as the investor.

Okay, next paragraph… So “The *address* is situated in one of the most highly desirable areas of the city in Texas, *submarket*, offering outstanding nearby amenities within a short walking distance (5-10 minutes), including high-quality shops, restaurants, bars, a park, a [unintelligible [00:11:21].16] with three baseball fields, hiking and biking trails, swimming pool and indoor gym.”

I think that paragraph is great. Maybe move that a little bit lower down… Again, this kind of depends on what you have as your subject line. If your subject line is “Off market deal in highly desirable submarket”, then this is fine to have here… Because you wanna highlight that it’s off market, and you wanna highlight why it’s a highly desirable submarket, and you went through all the nearby amenities.

One thing that you wanna confirm is that these amenities are actually relevant to the demographic at the property, your target demographic. Based on what you’re saying here, there’s probably a higher-income white-collar demographic… So make sure that those are the actual type of people at this property, and not a different demographic that these aren’t really relevant to.

Next paragraph, “The property’s location and access to major [unintelligible [00:12:14].27] places it within only a ten-minute drive to downtown, and a 20-minute commute…” – I think this might be a typo… “A 20-minute commute of city’s largest employment hubs, enhancing the appeal for the area’s affluent white-collar demographic.” So there you go, it is a white-collar demographic. But I think there’s a typo there. I think it’s supposed to be “and a 20-minute commute to this city’s largest employment hubs.”

“The historic submarket neighborhood and acclaimed corridor offers its residents an unapralleled live, work and play environment with a charming character, in a high barrier to entry market, given intense supply constraints from historical designations.”

That entire paragraph sounds like it got pulled straight out of an offering memorandum. You wanna be as specific as possible in this. You’ve gotta keep in mind that this is the first thing that your investors are gonna see, and so every single sentence should give them some important piece of information about the deal itself. So your second paragraph that talks about all the different amenities within walking distance is great; talking about how close you are to downtown, how close you are to the largest employment hubs… But the next paragraph about the neighborhood and the corridor is kind of a mouthful; it’s describing it, but it’s not specific enough. “It offers  the residents an unparalleled live, play, work environment, with charm and character, in a high barrier to entry market, given intense supply constraints from historical designations.”

If you want to, you can be more specific on supply constraints, you can be more specific on the high barrier of entry… But you’re kind of just saying things that are reiterating what you’ve said before.” You’ve mentioned that there’s work, you’ve mentioned that there’s play, and there’s live, but you don’t really need to mention that again. So I’d probably just delete that entire sentence in that paragraph, starting at “The historic submarket neighborhood, and acclaimed…” — I’m not sure what that is, but the corridor… I would just delete that entire sentence.

At this point, this person goes into talking about the business plan. So if you’re gonna have the highly desirable submarket in your title, you wanna get into more specifics on the submarket and why it’s highly desirable. I understand that you’ve talked about the jobs and the amenities, but why else is it desirable? What top lists has the submarket been on? What’s the submarket known for? What’s the job growth been? What’s the income growth been? What’s the unemployment reduction been? There aren’t any numbers in here, besides the distance to the amenities… So you wanna put some percentages in here, some historical trends, and be more specific on why it’s a good neighborhood.

For example, I’ve got one of our deal emails pulled up over here. One of our deals is in a Florida market, and we said that “The *blank* market has experienced some of the nation’s highest annual rent growths, with rents growing an average of over *this much* annually since 2015. This submarket has also experienced one of the highest population growth and job growth in the nation. Over the past decade, the population has grown by x%, and is expected to grow by x% over the next five years, compared to the national average of 3.5%. The number of jobs have grown by 27%, more than double the national average of 13%.”

Now, that’s the first paragraph in this new deal email, and as you can see, we go into specifics right away of what metrics we have as evidence as to why this is a highly desirable market to invest in.

So what I would do is —  your first sentence is fine, except for the weird contract language… But the second paragraph I would move down; or between the first and second paragraph I’d put in some of those metrics I’ve mentioned – population growth, rent growth, employment growth, new jobs growth, things like that first… And then mention “Also, they’re really close to these shopping centers.”

And then harping on this point even more, you mentioned it’s really close to the largest employment hubs – what companies are there? Maybe mention some of the companies, so I can relate to what these companies actually are. I have deeper questions from reading this, and you wanna proactively address those questions so that you’re not getting a  bunch of emails from investors, and it makes you look more professional overall.

Going back to the beginning where I talked about the picture – it looks like the company logo is actually in the picture. I confused what the name of the property was with what your actual company name was.

“The company plans to reposition the asset by renovating the exteriors, interiors and common areas, which will allow for substantially higher rental rates, that meet or exceed other comparable properties within the submarket that have upgraded improvements.” I think “they have similarly upgraded improvements.”

So again, there’s no specifics here. I know you’re telling me that you’re gonna be able to increase the rents, that are going to meet or exceed the rents at other properties… So if you actually think about that, [unintelligible [00:17:01].27] that’s not actually a positive. Having a higher rent is good, but you don’t wanna be the market leader. You don’t wanna say that “We’re projecting rents that are going to be higher than the comps.” You want your rent projections to be actually lower than the comps, and then hope that they actually meet or are higher, so that you’re able to return that much more money.

So you wanna reward that to say something along the lines of “We plan to reposition the asset by renovating the exteriors, unit interiors and common areas, that will allow for substantially higher rental rates, that will still be below the rents of other comparable properties within the submarket that have gone through similar upgrades.” That’s kind of a mouthful, but something along those lines of explaining that you’re gonna do similar upgrades to properties in the area, but you’re still projecting rents that are lower than what they’re getting. And then you wanna say what those actually are. You can say that “We project a $100 rental premium, which is $75 below the comps.” So more specifics.

The next sentence – “This value-add opportunity aligns well with our company’s core strategy to acquire non-institutionally-owned operated or targeted assets, where our management efficiency and capital renovations can be executed to enhance NOI and overall assets.”

I’d probably just delete that sentence altogether… Because you’re kind of just saying things that should be already known. They should already understand what your strategy is, they should already understand that of course you’re gonna increase the net operating income, and increase the value of the property. Because hopefully this isn’t the first time you’re talking to these people, so they already know about your company, the types of deals that you look at, you already know about their return goals, so that once you have a deal, you send it out and you’re just describing the actual opportunity, and not explaining the specific business plan for that opportunity, but not your grand vision, because they should already know that.

The next sentence – this company sourced the deal on an off market basis, through direct connection with the seller, and intends to co-venture with our local partners for operations, construction and management. That sentence is fine… Unless they already know this.

The next sentence “The venture is seeking indications of interest for equity investment in the property alongside a contribution from our company and its partner, with capital commitment by this date. Please review the attached investment overview summarizing the opportunity and the valuation model.”

I’m not necessarily sure exactly how this email was sent, but I would recommend in that sentence linking to the presentation, rather than attaching it. If you’re just sending this through email, you should be able to upload that presentation to Dropbox and copy and paste that link at this point, and then send out your email.

Alright, now we’re getting into the estimated investment returns. It’s got the purchase price, the acquisition cap rate, the estimated annual investor IRR, which is actually a range, which is interesting… I’d be curious to see why it’s a range and not a specific number that was outputted from the model. The estimate investor multiple – another range. An estimate average cash-on-cash (five-year hold), estimate stabilized cash-on-cash, estimate hold period.

So for our deals, what we do is we put in cash-on-cash return and IRR to the investors. IRR based on what the hold period is, and then cash-on-cash that does and does not include the sales proceeds… And I guess you’ve got some more stuff down here, so… This is just the returns.

So you’ve got the IRR, and you’ve got average cash-on-cash return, and then stabilized cash-on-cash, which I’m assuming means once you’ve actually stabilized the deal. So you’ve got a lot going on here… You’ve got the estimated hold period of 3-5 years on here as well… I would probably just put the returns. So you say it’s the estimated investment returns, but you’ve got purchase price, cap rate, hold period… So I would just put the IRR and the cash-on-cash returns, with and without profits from sale. You can keep the equity multiple in there as well if you want. But I’d take out purchase price, I’d take out cap rate, I’d take out the hold period.

Next is deal structure and fees. Estimated equity required you’ve got on here… I probably wouldn’t put that on there, because that’s not something that’s super-important for your investors to know. Minimum investor commitment – of course, keep that in there. Investment terms – the structure is 8% preferred return, compounded annually; 70% split to investors above the preferred return… And you’ve got more details on the companies that co-invest, how much equity they’re putting in the deal, and then the acquisition fee, asset management fee, construction management fee, disposition fee charged… We don’t put this level of detail in our emails, because again, we just wanna get all the highlights of the deal to them first. They can read all that stuff in the investment summary. So I would probably remove the majority of that and just keep the minimum investment amount, and then you can keep the preferred return in there as well, if you want to… But when you go into your fees, I probably wouldn’t put that in there.

And then deal timeline, capital call, and then closing date. You’ve got both of those on there as well. What I would do is I’d probably condense this section, to just having the returns – the IRR, the cash-on-cash, then the equity multiple if you want to. Minimum investor commitment amount… If you want to, you can keep the 8% preferred return and 70% split in there, and then the deal timeline.

And then lastly, “Feel free to reach out with any questions or discuss the investment opportunity in further detail.”

One thing that I see right off the bat that’s missing from here is explaining what they should do if they want to invest. You wanna put in a sentence that says “If you want to invest, here’s what you should do. Reply to this email with your investment amount.” Also, I don’t see any information here about an investment conference call. So if  you’re hosting a conference call, you wanna have all that information set up, so that investors will be able to know when you’ll be hosting this conference call, so they can sign up for it.

Besides that, you’ve got a lot of information here. I think maybe you’ve got too much information in here, especially if you plan on doing a conference call, and especially since you’ve got a summary investment overview attached; and it looks like you even attached your model, which I probably wouldn’t attach your model, just because that’s just going to generate way more questions, because you’re giving them access to your financial model. So you just wanna summarize the result of your model and then make sure you’re inputting all the assumptions you made in the investment summary… But you don’t wanna confuse them by showing them a crazy Excel document. Instead, you wanna summarize the model in your investment offering.

I do see that in the email you sent us you did go into more details on some of the things I mentioned. I see you went into the details on your rental premiums that you’re gonna demand, it looks like you went into a little bit more detail with metrics on the submarket… But you just wanna make sure you include this stuff in the email. You wanna make this email with the expectation that the majority of investors aren’t gonna read through the investment summary. So what’s all the information that you want them to know about this deal to get them to invest – you wanna put all the information in this email, and the most important information should be upfront.

That was interesting… Hopefully the feedback I provided was helpful. At the end of the day, it depends on what the goals are of your investors and what they care about. Our emails are curated based off of the goals of our investors.

If I said something to take out or to put in that you know is not relevant to your investors, then of course, don’t do it. Overall, I think you did a really good job, but my overall feedback – it feels like you copied and pasted certain aspects of the investment summary into this email. Instead, you want to write this from scratch, and make sure that you’re including all of the most important information about the deal to your investors. That’s gonna be about the business plan (which you’ve talked about in a little bit more detail), the market (which you’ve talked about, but maybe just in a little bit more detail), maybe a little bit about the type of debt that you’re putting on the deal, if that’s important… You’ve mentioned your team a little bit, but overall I’d say that if you say something and you read it, and it’s not really adding value to the email, then just don’t put it in there. You want every single word in that sentence to add value, and if it doesn’t, you can take it out.

So yeah, Alex, that is my feedback for your new investment offering email. Again, for those of you who are listening, everything I’ve talked about is based on the information I shared in series 18, where I talked about the entire process of creating a new investment offering email… So I essentially analyzed this one through that lens. If you wanna learn why I think certain things should or shouldn’t be included, make sure you check out series 18. I believe we also have a sample email for  you to download as well.

That concludes this episode. In the meantime, check out our other Syndication School series. I believe this is series 24, so we’ve got 23 other Syndication School series you can listen to, about the how-to’s of apartment syndication. Make sure you check out those free documents as well. All of that can be found at

Thanks for listening. Alex, I hope this was helpful. Best Ever listeners, I hope this was helpful. Have a best ever day, and I will talk to you soon.

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