Category: Real Estate

In February 2020, Georgia Senate passed bill allowing  “the state teacher retirement fund to invest in certain alternative investments”. The bill received 34 yes and 19 nays from the senate.

Senator Ellis Black acts as the state senator and sponsor of the bill, wanting to invest retirement assets into alternative investments such as venture capital funds, private equity, and distressed debt.

The Teachers Retirement System of Georgia (TRS) has been investing strictly in equities and fixed income. The current investment percentage is 29.8% in fixed income and 70.2% in equities. SB294, the new bill, sets a 5% target allocation to alternative investments.

In order to provide the greatest investment opportunity, the efforts would focus on a well diversified portfolio.

Georgia is the only state that did not allow TRS funds to be invested in alternative investment channels. The senate expects expanding to alternative funds to give the highest ROI possible for public workers.

The next step will be the Georgia House giving their final verdict of SB294.

One of the initial crossroads new note investors face is determining their level of comfort investing outside of their own backyard. There is something reassuring about residing within driving distance to your investment property with the flexibility of driving to it at a moments notice. However, did you know there is actually much more opportunity available when investing outside of your own backyard.

ThinkRealty.com gives a great explanation as to why you should reconsider investing outside of your own backyard : https://thinkrealty.com/note-investing-from-afar/

For example, look at the stock market. If you limited yourself to purchasing stocks from a company within driving distance from your home then you are missing out the thousands upon thousands of investment opportunities available.

Unlike notes, stocks are a very risky investment and typically are directly correlated with the rise and fall of the economy. ThinkRealty.com explains “which would you want to own: a stock secured by a company’s assets in which you are the last to be paid off (assuming there is any money left), after bondholders and owners of preferred shares, and you share third position with hundreds of thousands of investors? Or would you rather own a note secured by a house in which you are the first to be paid off and you share that status with nobody?”

Purchasing/managing/selling distressed notes allows a great opportunity to negotiate with investors, get creative in your exit strategy, work with the homeowner… stocks do not offer this type of flexibility 

Additionally, look at these trying time our economy is currently facing. The stock market and many other investment industries are on the fence and we are uncertain which way the economy will tip. With the note industry, we are not directly effected by a downturning economy.

When you look at your note investment less like a “real estate” purchase and more like a “stock purchase” you see that it actually should not matter the location of the property. The responsibility of maintaining the home can be place in the hands of your selected note servicer or vendor. You will open up the door for many many more opportunities which, in turn, should propel your investments. 

On Wednesday, President Trump announced his administration will be suspending all FHA supported home-loan foreclosures and evictions until the end of April due to the coronavirus outbreak.

“The Department of Housing and Urban Development is providing immediate relief to renters and homeowners by suspending all foreclosures and evictions until the end of April,” Trump said. “So, we’re working very closely with Dr. Ben Carson and everybody from HUD.”

Homeowners with loans backed by Fannie Mae and Freddie Mac (which make up about 1/2 of the countries mortgages) will be granted foreclosure relief.

“Today’s actions will allow households who have an FHA-insured mortgage to meet the challenges of COVID-19 without fear of losing their homes, and help steady market concerns,” Secretary Ben Carson said in the statement, adding the move “will provide homeowners with some peace of mind during these trying times.”

Additional efforts to boost the economy have been made, such as the GOP senators working towards a stimulus plan. The stimulus package, which could possibly be $1 trillion, should be larger than the 2008 bank bailout (totaling $787 billion). 

It is still unsure to what degree the coronavirus will impact the housing economy, but in the meantime, you can prepare yourself and your investments, by diversifying your portfolio to industries that can withstand economic downturns.

February 21, 2020 by Chaz

It can be bittersweet…  you and your family are grieving your Grandfather or Aunt, and you find out they kindly left you with an inheritance. We see it in movies time and time again, someone is the heir to their relatives will and it feels sort of like they won the lottery. If you are considering spending your new large sum of cash on luxurious items like boats, cars and expensive vacations you should re-evaluate your decisions. Focus your finances in places that will give you returns down the road. We have provided 3 smart strategies to grow your inheritance, so you can make decisions that will positively impact you and your family in the future.

1. Talk to a professional

The most important step is talking to a professional. You do not want to invest into something you are not educated about. By talking to someone in a specific industry you can have all your questions answered to ensure you make less mistakes. If you are seeking a professional and not sure where to begin, we have team members that can give you ideas on successful investment strategies. Contact us here for more information.

2. Learn ways to diversify your portfolio

Step 01. Build a portfolio:

Investing your money is the only sure way you can let it grow. You can invest into IRA’s, stocks, bonds… which are all popular ways of investing. However, it would be most beneficial to invest in an industry with a proven higher ROI. Did you know investing into notes has 20-40% ROI? 

Step 02. Diversify your portfolio:

Once you have a portfolio built up, you should strongly consider diversifying your portfolio. During 2008, many traditional real estate investors were devistated when the housing bubble popped. Around this same time, the note industry actually had one of its most profitable years yet. Consider investing into asset classes that rock through recessions.

3. Choose long-term goals

During the past 20 years, REITS have outperformed all other asset classes (like oil, stocks and bonds, gold, etc.) by offering the largest ROI. What does this mean for you? 1. REIT’s are consistent, 2. REIT’s are a great long-term play.

Another way to invest in long term plays would be investing into re-performing notes. When you purchase a note, you are purchasing the debt to a home and you now become the bank. With a re-performing note the homeowner is paying you their monthly mortgage payment for the duration of the loan… sometimes for 10, 20, or even 30+ years. Every month you would receive passive income with minimal effort on your part.

While it can be tempting to spend your new inheritance on items that are more luxurious, it is much more beneficial to you and your family to create opportunities that will set you up for a more successful future.