Street Smart Success

A great way to reduce risk when investing in private placement alternative assets is to join an investment group. Investment groups give you access to other investors who you can compare notes with on successful investments and reputable sponsors you meet and start building relationships with. David Shirkey founded the Michigan Investor Group to help educate friends and family to help guide them through the complex maze of alternative investments and to introduce them to investment opportunities with strong cash flow and appreciation with little downside risk.

There’s no better way to vet someone you’re going to invest with than getting to know them personally. There are thousands of investment opportunities available and they all look great on paper, but the differentiator is the people because the proformas are generic. It’s the number of years of experience and the number of deals in the asset class of the deal the operator is raising money for, and equally as important, their personal character, that matters. Jeff Anzalone, Periodontist, Author, and founder of Debtfreedr.com, is a passive investor who helps other doctors and Health Care professionals create passive income through alternative investments.

When investing in Value Add Real Estate, construction knowledge is critical to avoiding costly mistakes that can ruin an investment. Dealing with contractors, engineers, architects, etc. can be a shark tank because they’re all trying to get your money. Also, if vendors don’t know what they’re doing or don’t have aligned interest with you, it can turn into an incredibly difficult situation. Van Sturgeon, seasoned Real Estate investor and principal of Greywood Restoration Ltd, has an extensive multi-decade career in construction and property rehab, so he knows how to maximize his investments and avoid common costly mistakes that others make when dealing with heavy value-add properties.

Alternative investments such as Real Estate and other private investment opportunities are becoming more favored as the stock market has had the worst first half of a year in 50 years. Whether it’s Real Estate, ATM funds, Venture Capital funds, Litigation finance, Life Insurance settlements, to name a few, more money is flowing into these assets because they’re less volatile and can generate better cash yield than traditional stocks. Denis Shapiro, Managing Partner of SIH Capital Group, invests in Real Estate and other assets that generate strong cash flow and appreciation.

In the Real Estate syndication ecosystem, one of the key roles is capital raising. Operators are always in need of capital to fund their pipeline of deals. One great way to get involved in syndications is to partner with operators by bringing them capital to their deals. Charlie Rushton, partner at Saber Equity, has partnered with experience operators in Value Add hotel-to-multifamily conversions, multifamily, self-storage, and short term rentals by bringing them investor capital to their projects. Saber Equity finds opportunistic deals and local sponsors that run the deals. Saber Equity invests in these deals themselves and brings other investors alongside them as Limited Partners.

Ever since the creation of the 506c code a decade ago, which permitted operators to market to the public, alternative investing in Real Estate and other asset categories has grown dramatically. Whereas a decade ago it was virtually impossible, for example, to invest in early-stage technology companies if you were a retail investor, now you can invest in these companies through private placement funds. There are many different ways to invest outside of traditional stocks and bonds and get better yields and potentially better returns. Andy Hagans, Co-founder of the Alternative investment Database, has created great content for investors on the Alternative Investment Database website and a great service that matches accredited investors with qualified sponsors.

Operating Multifamily properties can be more difficult than it seems, and no one will care about your properties as much as you do. Whether it’s staying on top of expenses line by line or making sure tenants’ maintenance needs are being responded to quickly, there are tons of things in the execution that need to be attended to in order to maximize a property’s potential value and generate the highest returns. Ryan Nunes, Founder of LifeChanging Capital, has been acquiring Multifamily properties over the last few years and has learned fast how to oversee third party managers and vendors and asset manage properties effectively.

As markets are changing, it’s critical to stay on top of trends to maximize your investment returns and minimize risk. For example, you’re starting to hearing more about Build-to-Rent communities as alternative living solutions for renters who no longer want to live in Multi-family complexes. They want more space, a two car garage, a lawn, and they don’t need the amenities of multifamily properties that a lot of people don’t use anyway. Brian Spear, Co-founder of Sunrise Capital Investors, started out buying mobile home parks a decade ago and in recent years has expanded into lucrative Parking Lot deals and most recently Build-to-Rent communities.

Real Estate has made many people rich, but there are other opportunities where the returns can be much higher and not necessarily with more risk than an average apartment building. Adam Jason, Partner in Legacy Group, manages Alternative Investment companies in Columbia with high upside and strong downside protection. His largest asset, The Green Coffee Company, is secured mostly by land acquired with cash or seller financing so there’s virtually no debt and therefore very little risk. The Green Coffee company is rapidly growing an investment at this point can result in an 8 times investor return over the next 4 years and possibly more. Prior to founding Legacy with a partner, Adam advised the world’s leading investment banks including JP Morgan, Morgan Stanley, Citibank and Goldman Sachs. Adam also served as outside counsel for some of the world’s most recognizable brands, such as The Sherwin-Williams Company, R.J. Reynolds Tobacco, Procter & Gamble, Macy’s and Yeti Coolers.

The profits on land investing can be stratospheric. Brent Bowers, Land Coach at The Land Sharks, makes outsized returns on buying land and he a ton of monthly passive income without having to deal with tenants or maintenance. Brent has merely learned and followed a repeatable process and discipline that has yielded consistent, predictable results. It all starts with acquiring lists of tax delinquent land owners and sending offer letters with a specific dollar amount that compel recipients to respond.