As everyone knows, the economy has its “ups” and “downs.” Investors who watch the “Business Cycle” know that, regardless of where the economy is today, the next “boom” or “bust” is coming. We can’t predict with any degree of certainty when, exactly, it will arrive.
What we do know, however, is that the single, primary cause of the Business Cycle is government manipulation of the monetary system. Currently, and in recent history, the use of debt has been the favored method that governments have used to effect that manipulation.
The Bank for International Settlements “BIS” — known as “The Bank for Central Bankers” — said in its June 2018 report that:
▸ ballooning levels of debt are creating a “debt trap” that will be hard to escape;
▸ higher levels of debt can stimulate growth in the short-run, but only at the expense of deeper and longer recessions in the long-run.
The BIS also said that, even though the economy, as of June 2018, is generally still in an upswing, vulnerabilities in the economy do exist.
Prominent among the vulnerabilities mentioned by the BIS is nonfinancial corporate debt in the United States and the European Union.
According to the BIS, “[i]n the United States, in particular, corporate leverage today is at its highest level since the beginning of the millennium.”
Translation: a “correction” in the stock and bond markets is coming.
Investments in stocks and bonds are unsecured — the investor cannot foreclose on any asset if the company does not repay the investor — investments in both stocks and bonds are, as a practical matter, little more than loans to the company in which one is investing. If the company does not return the investor’s capital (not to mention a profit), there is little, if anything, the investor can do to recover the invested funds.
Private Real Estate Lending, on the other hand, is an asset-backed method of investing that investors can use as an alternative “traditional” investments such as stocks, bonds, and other non-asset-backed investments.
Private Real Estate Lending, as that term is used here, refers to an investor who loans investment capital for use in one or more real estate transactions.
The way it works is simple: “Real estate deals” are a real estate investor’s “Inventory.” A Private Real Estate Lender loans the Investor money to purchase Inventory; the Investor gives the Private Real Estate Lender a fully-collateralized, first position lien against that Inventory, as security for repayment (as compared to the fully unsecured investments in the stock and bond markets); the Investor sells the Inventory for more than the purchase price; and the Private Real Estate Lender gets repaid.
Both the Private Real Estate Lender and the Investor make money: the Private Real Estate Lender earns interest on the amount loaned and receives a return of the invested capital; the investor earns a profit on the sale of the inventory.
If you would like more information on becoming a Private Real Estate Lender, including how you can use your Individual Retirement Account (IRA) or similar source of funds, please click the link below to contact us.
Be sure to check the “Private Lender” box to let us know that you are interested in becoming a Private Real Estate Lender: CLICK HERE TO CONTACT US
The material contained in this communication is for educational purposes only; it is not, and shall not constitute investment advice; and is not a representation, guarantee, or promise of the results you may experience. Please consult with the independent professionals of your choice, should you need or desire legal, tax, investment, or other professional advice.
The material contained in this communication is not, and shall not under any circumstance or for any purpose, be considered as a solicitation or offer to buy or sell any security or security-related product, instrument, service or investment, and is not intended for distribution or use in any jurisdiction where such distribution or use would be contrary to, or in violation of, the law of said jurisdiction, or where such distribution or use would subject The Note Company or any related entity or person to any registration requirement of, or personal jurisdiction in, said jurisdiction.
The Note Company is a Texas-based national Real Estate Note Investment Firm that helps Private Lenders and other investors reposition investment capital from under-performing uses to investments that are secured by real estate.