Tuesday, November 14, 2017

James Stepanian And Summerlin Asset Management: Diversifying Your Investments



Is Real Estate A Good Addition To My Portfolio?


If you’re used to dealing with investments in mutual funds or other traditional stocks and bonds, adding real estate might seem risky or too difficult to understand.  While no investment is without risk, historically many investors have used real estate as a hedge against inflation and a valuable diversification tactic in a portfolio otherwise given over to capital market investing.


How Can I Get Started Investing In Real Estate?


Many people worry that investing in real estate means dealing with all the hassles, research, and complicated paperwork that go with purchasing investment property.  Thankfully, that is not always the case.  Asset management firms like Summerlin, which is headed by James Stepanian, generally specialize in a particular type of real estate investment, and can help guide you through the process.  A quality asset management firm should be able to give you a risk/benefit analysis and help you decide which types of investment opportunities are best for your portfolio.


What Kinds Of Real Estate Investment Opportunities Are Available?


New types of real estate investment opportunities present themselves all the time, but at the moment Summerlin Asset Management is concentrating on two types of investment opportunity: development investments, and note investments.


1. Development Investments


Development investments involve the purchase of a piece of property and the making of subsequent improvements on that property to increase its value.  An asset management company should be able to manage all the various stages of such an investment, from acquisition of the property, to design of the improvement, construction, and delivery.  The ideal development investment holds the potential for significant capital appreciation.  As you may imagine, making development investment decisions requires an experienced team with specific expertise.


An example of a development investment opportunity might be the construction of a senior living center or a self-storage facility.


2. Note Investments


You’re likely already familiar with the idea of a “note” or a mortgage since you’ve probably paid a mortgage at some point in your life.  Note investments, where you essentially own the mortgages of other people, can be a lucrative way of diversifying your portfolio: you get paid, instead of paying.  One big advantage of note investments is that they come with collateral.  This means that you have the opportunity to benefit both the borrower and yourself while keeping your principal relatively safe.  At Summerlin, our note investments are designed to provide double-digit returns and preserve client principal.


Diversification Is Key


Historically, real estate investment returns and stock market returns have shown little correlation, which means that they can counterbalance each other nicely.  With the variability the stock market has shown lately, diversifying is a smart move.  Whether you choose to invest in development or note opportunities, real estate can be a valuable, stabilizing addition to your portfolio.


Sources:


Portfolio  - www.summerlinam.com
Note Investing - www.biggerpockets.com


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