Real Estate Debt Funds: An Investor’s Guide to Higher Returns with Less Risk
An Investor’s Guide to Real Estate Debt Funds Real estate debt funds first emerged in the wake of the 2008 financial crisis, providing an efficient way to connect lenders with developers needing short-term capital for a range of commercial real estate projects. Following the crisis, traditional lenders tightened regulations and liquidity requirements for borrowers. Banks were resistant to offering loans for commercial real estate and, if they did offer loans, they placed greater focus on income and cash flow than on equity and assets. Real estate debt funds were able to service a small but potentially very profitable niche market.
SEC Amendments Widen Access to Lucrative Private Markets for Investors
New amendments from the Securities and Exchange Commission (SEC) will expand the pool of eligible investors available for private offerings, benefiting both would-be investors and companies looking to raise capital. Towards the end of last year, the SEC proposed amendments to its definition of “accredited investor” in Securities Act Rules 215 and 501(a), and to the definition of “qualified institutional buyer” (QIB) in Rule 144A.3 T. The amendments, confirmed on August 26, make more investors eligible, as “accredited investors,” to participate in private capital markets. The original definition of “accredited investor” limited investment in private offerings to those people with specific income or net worth. Previously, would-be investors were assessed on their financial profile, usually requiring a minimum income of $200,000 (or $300,000 for spouses), or a minimum net worth or asset ownership of $1 million, either individually or jointly. With the new amendments, both individual and institutional investors who don’t pass the existing tests for income or net worth but meet defined measures of professional knowledge, or expertise, may now qualify to be “accredited investors.”
Commercial Real Estate Tax Breaks Under CARES Act
Tax Breaks Offer Relief for Commercial Real Estate Owners Needing to Repurpose or Reconfigure Existing Space to Accommodate Social Distancing The current crisis is forcing many rapid changes to be made in the use of commercial real estate space – at considerable expense. Now, there is at least some good news for those struggling with the cost of making major interior changes to their commercial space, thanks to generous tax incentives for qualified improvement property (QIP) under the umbrella of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. These tax breaks can help alleviate the financial costs of redesigning and repurposing commercial space. The key to benefiting from these incentives is the interpretation of QIP, which now includes any non-structural improvement to the interior of an existing building, necessitated by the need for social distancing.
How to Invest During a COVID Recovery
What will the post-COVID economic scene look like? What will be the best way to invest money when the economy starts to recover and where to invest money to get good returns? With America’s economic future subject to so many variables, investors must consider all likely scenarios when planning potential investment strategies.
Private Credit Has Potential to Be Driver in Economic Recovery
The private credit market has been a key part of the debt market for decades now, and has grown exponentially since 2008, usefully filling a funding gap for many businesses[1]. In the period from 2000 till June 2019, the private credit sector has grown from $42.2 billion to $795.3 billion [2].
An SEP IRA Investment Options May Offer the Perfect Retirement Planning Solution for Many Small-Business Owners
What is an SEP IRA? The SEP part stands for Simplified Employee Pension (IRA, of course, is Individual Retirement Account.) Simplified is always good, right? Well, it is fairly simplified, anyway; there are a few limits and restrictions to be aware of but generally it’s a straightforward idea. A simplified employee pension (SEP) IRA is a retirement savings plan established by employers, including self-employed people and sole proprietors, for the benefit of themselves and any eligible employees. [1] In fact, an SEP IRA may be particularly applicable for small-business owners and other self-employed individuals.
Alternative Investments are Becoming Mainstream
What are alternative investments? Alternative investments are non-traditional investments – that includes anything that is not stocks, bonds, or cash – or even the use of non-traditional investment strategies. They include such investment vehicles as: precious metals, collectibles, hedge funds, natural resources, private debt (including mortgages), private equity, real estate, and infrastructure.
What is Needed for US Companies to Safely Re-Open Offices?
As businesses across the country, start to re-open their office space, business owners are working overtime to see what precautions they need to put in place to ensure that employees and visitors are as safe as possible. The first point of reference for health and safety protocols will likely be the Center for Disease Control and Prevention (CDC). CDC’s guide is lengthy and detailed; it contains guidelines and recommendations only, but it is hoped that employers will be sufficiently concerned for the welfare of their staff to incorporate these protocols to the best of their ability.
COVID-19 Proves the Tipping Point for Many Residents to Abandon Densely Populated Cities
Will This Trend Continue and How Will Cities Adapt and Regenerate in the Aftermath? Many of the world’s largest cities suffer from the same complaint — their housing market is out of reach for most of their residents. While Hong Kong vies for the honor of the world’s most expensive city, many cities in North America have similar issues with a lack of affordable housing. San Francisco, Los Angeles, New York, plus Vancouver and Toronto in Canada, all have hyper-inflated house prices, and rents that leave residents that either choose or need to live there, often spending more than half of their income on housing while many low- to middle-income families have about as much chance of flying to the moon as they have of ever getting a foot on the housing ladder.
The Post-COVID Real Estate Landscape: What Will the Real Estate Sector Look Like for the Remainder of 2020?
Seldom do we experience a specific event that creates a paradigm shift in our view of the investment world. The coronavirus pandemic will undoubtedly go down in history as the second such experience in the last 13 years. This is due to its wide-reaching effects upon individuals, the global supply chain and the entire economic scene. However, at some point the curve will flatten, new cases will become fewer and a vaccine will be created. At this point, the light at the end of the tunnel will become visible. But what does this mean for the real estate sector for the remainder of 2020 – and beyond?