In the real estate sector, there are special instruments used for investment opportunities, of which one is ‘ Real Estate Note’. It focuses on the revenue generated from a property rather than having a physical owner on the property. This revenue generated is referred to as a debt instrument on the property which is remitted to the investors.
In this blog post, we talked about how to get started on real estate notes investment, its risks and benefits to investors.
What Are Real Estate Notes?
Real estate notes, also referred to as ‘Trust Notes’, are debt incurred on properties by real estate companies or lenders to be paid to investors. For instance, when you invest in ‘Sterling Real Estate Note’, it pays a return of 10% in six (6) months. If you invest NGN 5,000,000 which is the minimum required, it means you will earn NGN 500,000. When you invest in real estate notes, you will generate passive income without the traditional method of holding the property.
Types of Real Estate Notes
Performing Real Estate Notes: With this notes investment, the investors receive their payment without default.
Non-Performing Real Estate Notes: In this notes investment, there is default in payment of the revenue incurred.
Secured Real Estate Notes: These notes investment are referred to as secured because investors have the right to withdraw their funds.
Unsecured Real Estate Notes: The risk attached to these notes investment are very high because of the risk attached.
Benefits of Real Estate Note Investment.
Higher Potential Returns: Real estate notes offer more returns compared to traditional real estate investments, especially with non-performing notes.
Passive Income: The interest on real estate notes are generated regularly either monthly or yearly, based on the investment agreement.
Diversification: Investors can diversify their investment portfolio risk through real estate note investment.
Potential for Appreciation: Real estate notes allow investors to control larger amounts of property value with a smaller investment fund.
Low investment risk: All rights associated with the property belong to the investor, which means they can foreclose the investment at any time.
Risks Associated With Real Estate Note Investment
- Default Risk: The risk of default on payment which means that the investor may not get the returns on time.
- Liquidity Risk: Some investors prefer to have a personal hold and management of their property investment. Which means if an investor is dealing with an individual instead of a company it might be difficult to back out.
- Legal and Administrative Costs: investors must understand the legal implication and administrative cost to avoid issue and for profitable investment.
- Market Risk: The returns on real estate notes sometimes change based on the fluctuating price of the property value.
Conclusion
Although real estate note investment might not be popular to some people. It is a proven method used by regular investors to build wealth. It is a unique opportunity to diversify an investment portfolio and earn higher returns.
Sterling Homes Limited offers an exceptional investment opportunity in real estate notes, providing a guaranteed 10% return on your investment within 6 months. This is a unique and attractive proposition that can significantly enhance your financial portfolio. By investing in our real estate notes, you are not only benefiting from a guaranteed rate of return but also from the stability and appreciation potential of real estate. Our commitment to a 10% return within 6 months with a minimum investment fund of NGN 5,000,000 ensures a predictable and reliable income stream.