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It is no secret that for years, the financial services industry has failed to meet the needs of Wealthy Families, High-Net Worth Individuals, and Business Owners.
This chart below shows the gap between the needs and appetite of investors (Left) and the shortcomings of the financial services industry (Right). Leaving a gaping hole. We are focused on three (3) critical areas of highest need and greatest impact.
We are doing our part by serving investors not as advisors, nor as sellers of institutional products. But rather as an agent of change whereby we recycle the lost and impaired assets that institutions leave in their wake. By doing so we serve as an economic linchpin, deleveraging a debt burdened society, restructure the personal balance sheets of the citizenry and bailout main street. Doing so stabilizes middle- and lower-class America and counter punches the income inequality that huge debt imbalances produce.
Some of the most lucrative assets are distressed real estate, debt instruments and abandoned life insurance policies.
These assets are sometimes referred to as distressed credit (or distressed mortgages notes) and life settlements.
Distressed Real Estate Debt
Distressed mortgages typically come about in instances where the borrower is incapable of meeting the monthly mortgage payment obligation and thus the lender opts to sell the mortgage account. In some instances, a formal foreclosure proceeding may have already commenced and the property is pending an auction as a result.
Life Settlements
Abandoned life settlements become abandoned once they have outlived their intended use. Business owned life insurance (BOLI) or corporate owned life insurance (COLI) are some examples of polices that have a shelf life for their original intended use.
While these types of assets are not usually accessible to investors...
With GRIT Partners, investors can now gain access to compelling opportunities within the real estate market at a greater discount, more security, and with less exposure to downside risk.
Below are the top three (3) core components to identify the most attractive opportunities.
Extensive Market Research
Conduct thorough market research to identify cycles with a high potential for distressed opportunities. Analyze economic indicators, interest rate, and local job market conditions to target local markets where distressed assets are available at attractive prices.
Idiosyncratic Risk Mitigation
Develop a risk mitigation strategy that accounts for potential challenges associated with distressed mortgages. This may include estimating conservative valuations, factoring in unexpected carrying costs or title curative issues, and maintaining a contingency reserve to address unforeseen issues.
Stringent Deal Sourcing
Develop a strong network of asset managers, brokers, financial institutions, and distressed mortgage specialists to source potential deals. Actively seek out distressed mortgages through bankruptcy auctions, other fund liquidations, FDIC and other government listings, or direct negotiations with distressed mortgage asset managers.
Real estate is a core asset with a long performance history. However, the vast majority of investors are unaware of certain sub-categories, such as distressed debt, within the real estate asset class. With distressed real estate debt, there is less of a chance of pricing being driven up and less of a chance of just “buying the market.”
Very few investors are aware of the benefits that life settlements offer including inflation hedging, tax mitigation and income security.
Success within these areas requires a partner with experience, expertise, execution and most importantly, consistent investor education.