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The Truth About ‘Diversifying’ Your Investment Portfolio

Real Estate Property Investment

Ignite’s Bill Bray Makes the Case for Variation

 

Sometimes, words that get thrown around in investing don’t mean what you think they mean. A great example of this is the word “diversification.” Bill Bray, an investment agent at Ignite Funding, delved into this particular misconception in detail at the Think Realty San Diego Group Event, held Feb. 18, 2017.

“People hear the word ‘diversification’ and think that it means that you need to buy in the stock market,” he explained, adding that in reality, experts who recommend portfolio diversification often simply mean that your real estate investment portfolio could possibly stand a little more variation. “Diversify the types of real estate in which you invest,” he said, pointing out that an investor can derive great benefit from implementing both strategies that create short-term income, also called “current income,” as well as long-term cash flow.

At Ignite Funding, Bray and his colleagues specialize in helping investors in that diversification process. “From the acquisition of land to the construction of a home or commercial building,” Ignite not only makes sure that the process of a project is completed in a timely manner, but also that all due diligence happens in deep detail during each phase. “Ignite funding offers crowdfunding real estate backed by collateral,” Bray explained, noting that this enables real estate investors to “be the bank and earn monthly income for the use of their investment dollars.”

One of the things that makes Ignite unique in the sector is its longevity. The company was founded in 1995 and has evolved with the real estate industry over more than two decades. As a result, the group has the “luxury” of working only with what they describe as a “handful or borrowers with a proven track record.” Bray noted that Ignite evaluates all loans before presenting them to investors via a user-friendly online interface. That evaluation process includes (but is not limited to, he emphasized) location, market conditions, borrower track record, financial condition and exit strategies.

“This type of investing enables investors to truly take full advantage of the value of note diversification,” Bray explained. Ignite takes on projects across the spectrum, including acquisition of land, development and construction of residential and commercial properties. The company also uses trust deed investments so that investors are able to collateralize their investments against real property. It sounds complicated, but Bray noted that investors who work with him and his company essentially have the tough stuff done for them. “The hardest part of note investing is opening an account,” he said.

 

About the Author

 

Carole VanSickle Ellis is the host of Real Estate Investing Today, a daily nine-minute investing podcast, and the editor of the Bryan Ellis Investing Letter. Contact her at editor@bryanellis.com or visit www.selfdirectedinvestor.org.