Investors are continually looking for ways to diversify their portfolio further and grow their investments. Real Estate has long been a standard method to gain capital through investment. However, in the past, this meant substantial investment commitments to single projects.
Modern methods now allow investors to protect themselves by investing in mortgage pools through reliable and experienced Mortgage Investment Corporations (MICs). Mortgage pools are an excellent alternative investment option to add to any investment portfolio. The real challenge is picking an investment manager and MIC you can trust.
Once you’ve researched a few MICs, it’s time to sit down and meet with an investment manager. There are a few questions you need to ask to be sure this is the right investment manager for you.
1. What does the history of the corporation look like?
This is one of the most essential questions to ask. An investment manager can tell you their strategy and plan for the future, but how they’ve handled their past will offer insight into how they’ll navigate varying market conditions.
You’re looking for an investment manager who notices and pivots their strategies based on market conditions. Markets will change and fluctuate, so you’ll need an investment manager to take this on instead of yourself. A good investment manager will understand real estate investment enough to navigate both the hot markets and the downturns.
2. What is the strategy of the investment manager?
An investment manager’s strategy is what sets them apart from other MICs. It’s essential to understand how they determine what real estate projects to choose and what their goals are for a fund. Where do they get their information related to market shifts and trends? Are they risk-takers, or are they more calculated in their decision making?
It’s essential to understand the strategy and process your investment manager uses to grow your investment without unnecessary risk.
3. What are the fees?
Many investment managers have fees, so before you decide on one, make sure you have a clear understanding of how they’re being paid and if that will influence their strategy.
Cooper Pacific charges no fees for an investment in any of our MIC portfolios unless it’s a registered investment with an outside trustee.
4. What are the restrictions on your investment capital? How liquid is your investment?
If you ever needed to pull your investment capital out for an emergency, how liquid is your investment? It’s important to understand the regulations and specifics of your investment upfront to prepare your overall investment portfolio better.
At Cooper Pacific, shares in our MIC are invested for one-year terms. After that time, you’re free to reinvest for another year or pull out funds with written notice.
5. Do you like and trust this person?
Ultimately, your investment manager is going to be responsible for growing your investment. It’s essential to know how successful they’ve been, their methods for the future, how much you’re paying in fees, and how locked in you are. However, it’s equally important to like the person handling your money and to feel comfortable asking questions and expressing concerns when you have them. Ask yourself “do I feel comfortable with this person, and do I trust them?”
You’ve made a decision.
You’ve asked all the questions, done all the research, and now you’re ready to invest. Great!
At Cooper Pacific, we’ve been helping investors like you invest in the real estate market through alternative investments in the form of mortgage pools for over 25 years. We pride ourselves on being open and accountable to all our investors, and we remain in close contact at all times. Get in touch with Jordan on our team today to learn how to start investing in mortgages today.