Getting Started with Private Notes and Mortgages

Let us consider the way many homeowners, developers, and investors approach real estate as an investment. Individual investors, as well as institutional investors, have long realized that investing in real estate with leveraged funds is seriously advantageous since the owner benefits from appreciation on the borrowed funds as well as on their own input. It is this rationale that encourages savvy investors to borrow money to invest in more expensive property and/or to renovate and flip a property. Nothing new here.  

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US Home Sales Surge to Record Levels in Q2

The current surge in the US housing market shows little indication of slowing down any time soon; figures for Q2 of 2021 show record increases in a number of sales as well as prices of homes sold. Prices continue to rise this year, twice as fast as original predictions. In fact, house prices are forecast to outpace the growth of both GDP and domestic inflation. 

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Is the Proper Investment Asset Allocation Rule Outdated?

The standard rule – of a portfolio ratio of 60 percent stocks and 40 percent bonds – undoubtedly served investors well for a long time. The once golden rule was based on the concept that stocks carry the likelihood of substantial medium- to long-term gains whereas bonds provide a safety net of reliable, if lower, returns. However, for the last 20 years or so, ever since the dot-com boom of the late 90s, the investment world has realized that traditional advice is no longer fit for purpose. At a time when stocks are soaring and bonds are returning minimal values, investors understandably doubt the wisdom of a 40% bond holding. 

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Why Are Alternative Investments Gaining Popularity?

Alternative investments are gaining popularity with more investors adding them to their portfolio or increasing their existing allotment. There are several reasons why alternative investments are enjoying high levels of popularity right now: diversification; avoiding market volatility and the current high cost of equities; not wanting to be limited to publicly traded stocks; frustration with low returns on ‘safe’ investments; needing a hedge against inflation; increased accessibility; and personal interest or passion, as in the case of collectibles.

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Investment Demand is Driving Increased Interest in Alternative Assets

For some time now, alternative assets have been increasing their share of the investment market, gaining nine percent of market share between 2017 and 2019, driven then, as now, partly by investors seeking better yields.  Hedge funds have remained buoyant and look poised to play an integral part in the economic recovery. Additionally, many sectors of commercial real estate are seeing increased activity, despite an uncertain and often turbulent year for commercial real estate in general; issues resulting from the pandemic are playing a significant part in this increase.

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