The Advantages of Private Mortgage Lending
Atlantic Capital Fund invests in private mortgages for one reason: the advantages of private mortgages far outweigh paper investments. There are numerous reasons private mortgages are superior to other investment vehicles and here are a few of the many reasons Atlantic Capital Fund is excited about helping clients get started in private mortgages.
• Less fluctuation than stock market
• Compound several times a year
• Greater control over when and how much you invest
• Easier to understand than other investing vehicles
• More predictable than the stock market
• Real estate is a tangible asset, unlike paper investing
The primary reason Atlantic Capital Fund is so high on private mortgages is that, unlike paper investing, private mortgages are backed by a tangible asset that will always have value. If an investor owns stock in a company and that company folds, the investor is out of luck. Granted, they might own preferred stock, in which case they’ll get their money before common stockholders. That is they’ll get their money if there’s any money left after liquidating the company assets and paying off debts.
If a borrower defaults on a private mortgage, on the other hand the property is sold in a quick sale. Atlantic Capital Fund purchase properties and add value through redevelopment. That way, should it be necessary, Atlantic Capital Fund can be sure to liquidate the property quickly and get a return into their investors’ hands. The investor can then roll that money into another private mortgage quickly and start earning returns again. Each project has its own entity for your direct investment.
Stability of Private Mortgages
According to the Federal Housing and Finance Agency, the largest quarterly drop of housing prices from 1991 to Q3 of 2009 was -2.44%. Remove the years of the recent housing crisis and real estate’s largest quarterly loss was -0.15%. In that time, only 10 quarters saw any drop in purchase prices.
In summary, the selling price of a residential property is unlikely to go down and, if the price does drop, it won’t drop far and it won’t stay down for long. The properties backing private mortgages can be sold quickly and at a price that’s higher than previous selling prices. This stability is great protection for and investor’s nest egg.
The stability of property value isn’t the only reason private mortgages backed by property are such a stable investment. There are other reasons investments backed by property are bound to give the investor a solid return.
Demand for housing is increasing at an astounding rate. Yet the supply of housing available is not keeping up with this growing demand. Every new child that is born will need housing. Every additional high school graduate will find their own home and start their own family. This pressure on the housing industry means that there will always be a demand for new homes.
In short, if the improvements on a piece of real estate are kept in good condition, the value of that real estate will continue to go up. Now, it’s true that there are factors that can cause real estate value to go down. A home in need of repair, for instance, will have a lower value than that same home in good condition.
Situations like these are great opportunities for Atlantic Capital Fund. We have a variety of quality contractors on call to refurbish distressed houses. We make the necessary improvements to bring the value of the property up to our requirements before finding renters and offering a private mortgage to our clients.
The property value returns to where it was before falling into disrepair and quickly jumps above that value. A renting family gets a home that’s had a wonderful facelift, and an investor gets a sound investment backed by a valuable property. Everyone wins.
Investors or borrowers who want to make money in Real Estate or need a loan or need a business loan or equity.
Atlantic Capital Fund LLC