Seeing Through the Smoke in Investment Pitch Decks 

Seeing through the smoke in investment pitch decks saves time and avoids pitfalls.  Knowing which data correlates highly with investment success and which correlates nicely with your investment profile can make proposal evaluation easier, even more profitable.  Follow these tips for better evaluation of proposals. 

Common Smoke Screens:

1. Overly optimistic and overly detailed financial projections

2. Belabored specifics about property characteristics and condition

3. Line by line items of the property’s current expenses

More Useful Sections:

1. High level property details

2. Reasonable return projections

3. The “ask” capital investment

4. Area economics

5. Working capital reserves

Even with the best data, investments can be risky.  But with obtuse or overly burdensome data, even the best investing minds can be misguided and distracted.  Many insightful investors lose interest in otherwise sound investments due to nothing more than the transgression of overexuberance in presentation details.  The burden of concise, impactful investment decks rests on the presenter, but the challenge of lifting and sifting the pertinent data remains with the savvy investor.  

High Correlation with Success

According to a recent article by the Forbes Real Estate Council, several chief factors tend to be pivotal for the success of certain investments, two of the most important are favorable market data of the surrounding area as well as healthy working capital reserves.  Investors would do well to magnify the importance of the area economics, such as job growth, population growth, etc. as they skim investment proposals.  In addition, searching deck slides for working capital reserves in case of vacancy, dramatic property tax increases, or unforeseen property repairs will give an investor perspective into the managing team’s approach to risk and return. 

Wrap Up

More presentation decks arrive in the inboxes of sophisticated investors than are wanted, most of which not only misalign with the recipient’s investing profile but also overshoot in detail and naive optimism.  Shrewd investors efficiently see through the smoke,  recognizing high success factors that increase the chances of good returns.