To change your portfolio, you need to change your investment thinking. But how do you do that? First, as an investor you need to discover a different avenue for investing, rather than the traditional route of stocks and bonds. One alternative route would be Trust Deeds in real estate. At Ignite Funding, we offer Trust Deed investments that match reliable real estate borrowers with investors seeking capital preservation in collateralized real estate; this alternative allows you to diversify your current portfolio. There are many reasons why Trust Deed investing may be right for you:
- Less risk: Real estate investments are a generally stable vehicle as the value is not correlated to the stock market, but rather the local market influences. Unlike the stock market, Trust Deeds provide an added protection as they are collateralized which provides the investor with first position recourse if the borrower were to default. As added protection to mitigate risk, in depth research and review is conducted by our in house underwriting team on all loans. At Ignite Funding, we use a loan-to-value ratio, Broker Price Opinions (BPO’s) and appraisals to provide assessments on the projects to ensure the investor built in equity on each loan.
- Diversification: When considering a strategy for your portfolio, a strong path would be to diversify your investments between Trust Deeds, equities and fixed income investments. In the last few years, real estate has proven to be an area in which to invest, especially for Ignite Funding investors. Other industries with recent increase in opportunities include the agricultural and technology industries. Through diversification, an investor can better control the impact that the market can have on their financial positions.
- The Yield of Trust Deeds: The Trust Deed market is controlled by smaller investors. Trust Deeds tend to not spark the interest of large corporations or government investors because the amount may be considered too small for them. The Trust Deed market is made even more exclusive for smaller investors because Trust Deed investments do not offer instant liquidity. Therefore, leaving the investment opportunities in the hands of smaller groups of investors who can tolerate some illiquidity in return for the potential to gain more from higher annualized returns than more liquid investments can offer.
- Minimum Investment: At Ignite Funding, you can start investing in Trust Deeds for as low as $10,000. This minimum barrier to entry allows investors to make a smaller investment to test the market. Depending on the firm, the minimum investment can range from $10,000 up to $100,000+. By providing lower investment opportunities here at Ignite Funding, we allow middle-class Americans the ability to diversify their portfolio and take the first steps in investing in real estate.