Resting assured after retirement can be difficult. Many retirees want to continue working for a various reasons. A uniting cause tends to be a desire to maintain income during retirement. Earning money in your golden years takes various forms from odd jobs to starting a business to investing. Alternative investing via real estate lending is an excellent option for retirees looking to supplement their income.
Private lending in the real estate market provides a hybrid alternative to both conservative, ultra-safe investments and riskier, speculative investments. With due diligence, experienced advisors and the right market conditions, these alternate investments offer relatively safe and quick returns.
Benefits of private lending include:
- Allows for diversification of most retirement portfolios. A diverse portfolio can be stronger because it means that you do not risk losing everything if your eggs (containing money) are all in one basket. The addition of private lending to portfolios comprised mostly of stocks, bonds, mutual funds and 401(k) strengthens your position.
- Private lending assets are tangible. Unlike any other asset, you are the owner of an actual entity in the form of a note or lien. It is your asset and yours alone, versus bonds and stocks that are shared, subject to stock valuation and less tangible.
- Noble’s private lending opportunities identify quality opportunities specifically in Texas markets through their Private Lender Network in Austin, Texas. This focus affords Noble’s clients the security of being backed by one of the best housing markets in the country. Despite hits to the oil industry, Texas has maintained strong economic and population growth, with the housing market following suit. As of July of 2015, Texas home sales had increased 46.3 percent over the first quarter 2015 and 4.7 percent year-over-year (to 88,906 home sales). Additionally, market value stability remains with median prices increasing, growing from 8.1 percent from second quarter 2014 to $200,000 (this also marks an all-time high for median value in Texas). According to realtor.com, Austin-Round Rock, Dallas-Fort Worth-Arlington, Midland and San Antonio-New Braunfels were among the 20 hottest markets in the country (as of 2015).
- Private lending opportunities such as Noble’s investments are often insulated against volatility on Wall Street. Historically, they have produced seven to 10 percent returns for PLN Members prior to, during and post the time of the recession of 2008. Meaning if the traditional stock market takes a hit, the housing market does not necessarily follow suit Texas’ housing demands continue to be robust. Additionally, you have monthly income generation in the short term versus the long term with average investments seeing full return in within 10 to 11 months.
Dependent upon the amount and type of investment made, typical yields will be between seven and 10 percent interest on the principal. In the case of Noble Capital, with a 14-year track record of originating and servicing quality real estate backed loans in Texas, maintaining a high level of performance is paramount. Distributions to participating investors are made monthly over the life of the loan. Noble has a 14-year track record of originating and servicing real-estate backed loans in Texas.