13 Simple Steps to Creating a Killer Investment Memo

At Fort, we have written countless investment memos to raise capital over the last 15 years. A great investment memo should be written in a fashion that virtually anyone with basic business knowledge can understand it. Warren Buffett often talks about writing his annual letters with the intended audience being his two sisters—both of who are savvy, but certainly not financial wizards. Keeping the memo simple, transparent, consistent, and to the point is always the best policy. 

We are constantly learning and evolving better ways to present information to our investors, and we treat our memos as a representation of who we are as a company. We take a lot of pride in making these the best possible, and I highly encourage others to do the same, especially for those raising capital for the first or second time. A polished memo goes a long way! 

Here are the 13 things we always include in our memos:

1.      Company Overview / Track Record. Who the hell are we, and why do we deserve your trust and hard-earned dollars?

2.      Investment Overview. For those that only like to read Page 1, they can leave with all of the highlights of the deal, financial summary / returns, and why we are buying it.

3.      Reasons to Acquire. What are 4 to 5 key reasons we are acquiring the property?

4.      Location Overview. Details about the sub-market.

5.      Property Overview / Specs. Details about the property and its specs. 

6.      Tenant Overview. Details and characteristics of current and future tenants (if applicable).

7.      Market Overview. What is going on in the market with which your property sits? Absorption, occupancy, key deals, growth, etc. Ideas here include:

  • a.      New construction in the market,
  • b.      Sale & lease comps,
  • c.      Market occupancy & absorption,
  • d.      Any key deals or additional market info, and
  • e.      Competitor analysis & current listings.

8.      Sources and Uses of Funds. Where is the money coming from, what are the terms of that money, and how will it be used during the investment period?

9.      Financial Summary. If all goes as planned (and it rarely ever works out exactly as planned), what can investors expect in return?

10.  Partnership Terms. What is the legal structure, waterfall structure, risks, fees, our skin in the game, etc.?

11.  Five Year Pro-Forma & Cash-flow Summary.

12.  Return Summary. For a lot of investors, this page combined with the investment overview is all they want to read. This page shows the return metrics our investors can expect to make. (A shortened version of this is also found in “Investment Overview”.)

13.  Property Photos / Map. We show detailed photos and a map of the sub-market with critical market information.

What other information have you found helpful to include in Investor Memos? I’d love to hear in the comments below! 

-CJPJ