Investor Insights: Connect Invest's Approach to Selecting Investment Opportunities
Everyone wants to invest and make upsides without risking many downsides, right? The secret to Connect Invest's success is defined strategies that guide decision-making.
Join us as we examine Connect Invest's unique investment strategy, from criteria to decision-making, and unveil the meticulous thought process that drives our successful investments.
We will dig deep into the capital preservation principles embedded in the Connect Invest model.
Getting to Know Connect Invest
Accessibility is a guiding principle for Connect Invest. We offer a barrier-free way for people to invest in a diversified portfolio of solid real estate projects. We aim to offer real estate note investing opportunities that provide returns equivalent to or higher than those in the traditional market. Passive real estate investing is free from the stresses and headaches of playing the stock market, and it stabilizes and preserves your principal payments.
The Connect Invest model makes it easy for investors to earn passive income, and getting started takes just a few minutes. After opening an account and linking a bank account to your digital wallet, investors can choose between a 6, 12, or 24-month investment term. Connect Invest's short notes - collateral-backed, first-position loans with specific durations - fund various commercial and residential real estate developments.
Investors earn monthly, fixed-rate passive income; the minimum investment is as low as $500, and there are no fees. As an investor, you reap the financial reward of investing in real estate without shouldering the stress of physical ownership or navigating dealing overhead, property management, or the complexity of the stock market.
With the Connect Invest model, investors earn even while they sleep!
A Look at Some of Our Exciting Projects
Curious as to what exactly your investment is funding? The experienced team at Connect Invest carefully vets the various real estate projects that comprise our Short Note Portfolio.
Some of these projects include:
Las Vegas, NV commercial acquisition
- The historical aesthetic of this 1950s-era, 32,000-square-foot building will be preserved by the borrower. A museum, pizzeria, and cafe will be features of this development. The proceeds will be used to acquire the property and continue the pre-construction work on the property.
Santaquin, UT residential development
- This 19-acre parcel of land is residentially zoned, and the borrower has worked with the city to obtain approval for a 165-unit townhome property. The proceeds will be used towards refinancing the acquisition of the property, including closing costs and fees, and to continue with project development.
Midway, UT residential development
- This project will see roughly 25 acres of farmland developed into 143 townhomes, cottage-sized lots, and a few commercial pads. The borrower already has over 40 reservations for the homes. The proceeds will be used towards refinancing the existing acquisition/development loan, completing the project's entitlement process, and finishing the development of the first 88 lots.
Kent, WA commercial acquisition
- This exciting project will see the borrower acquiring a 66,000-square-foot shopping center. Two of three tenants should be open and fully operational in 2023, while the remaining tenant will open early 2024. The proceeds will be used towards the acquisition of the property and the repositioning of the asset.
These are just a sampling of the Connect Invest investment opportunities. Check here to see all of our offerings.
What Protects Your Investment?
Investors want to protect their investments. That's a no-brainer. But how do they do this, and what strategies should be in play? Capital preservation and principal protection are two key ways Connect Invest helps protect investments.
Capital protection is a conservative strategy where the primary goal of a portfolio is to preserve capital and prevent loss. This strategy invests in the safest, short-term instruments, such as our short notes. Principal protected notes are a fixed income security that guarantees, at a minimum, the investor's principal is returned at maturation.
Many seasoned investors advise real estate investing as a sound capital preservation strategy. The collateral (property) protects the principal investment. If the borrower defaults, Connect Invest immediately takes ownership of the property and begins the foreclosure process. The property is sold, and Connect Invest recoups almost, if not all, the original loan back. Connect Invest projects are easily liquidated; that safety net is excellent news for investors!
The history of real estate as a solid, low-risk investment is an extensive, verifiable one. Real estate is a tangible asset whose appreciation has historically outpaced inflation. It offers tax advantages, strengthens financial portfolios through diversification, and can provide cash flow through rental incomes. Real estate is a low-risk investment that isn't going anywhere!
Our Criteria for Investment Selection
Connect Invest adheres to specific criteria when considering what real estate projects to invest in. Potential borrowers must tick the boxes of a list of variables to be considered for a loan. Let's take a look at some of these expectations.
- Connect Invest takes the responsibility of investing money very seriously. Our borrowers have a long-established history with us and our affiliate loan servicer, Ignite Funding. Our established and reliable developers have referred other borrowers to us, and these relationships have enabled us to cultivate a solid clientele.
Loan-to-Cost vs Loan-to-Value
- Loan-to-cost is a ratio that expresses the debt versus the total project cost. Loan-to-value expresses debt versus the fair market value. At Connect Invest, we focus on loan-to-value metrics, which gives us a more accurate idea of how much we can earn for the property in the rare event of a borrower default. Connect Invest's loan-to-cost strategy aims to loan 60 to 70% of the purchased value of the property. Doing this allows for 30% availability of movement - in other words, "wiggle room." While the real estate market is not typically volatile and tends not to have dramatic movement, wiggle room serves as a layer of protection.
3-Year Consumable Boundary
- Before choosing to invest in a project, Connect Invest analyzes its 3-year consumable boundary. This means we select properties that will likely sell within three years in the case of a default.
- A successful real estate project needs a market that can sustain it. With this standard, Connect Invest analyzes the population growth, neighborhood growth and development, and consistency of the market in the state/city where the project is located. A majority of our active projects are located in Nevada, Arizona, and Utah due to the massive growth taking place there.
- When deciding on an investment, the travel time to the project in question is an essential factor. We are committed to checking on projects on a weekly/monthly basis. This allows us to spot potential problems at an early stage and to remediate them immediately.
First Position Loans
- Connect Invest ONLY funds first-position loans. This secures our place as the first priority when the loan is paid back or in the event a borrower defaults.
Connect Invest's Continued Success
Ignite Funding is our affiliate loan servicer, and they have been the inspiration for our investment model. Their impressive record includes investments of over $1.6 billion in real estate projects across 1,300 loans with extremely minuscule default rates.
Since our inception less than five years ago, Connect Invest has seen significant growth each quarter. Investors are attracted to our transparent model, which focuses on capital preservation and higher-than-average interest rates.
Connect Invest can boast over $10.7 million in funding, 130+ projects funded, and over $510,000 in passive income paid to investors.
New and exciting real estate development projects that diversify our ever-expanding portfolio are being added weekly. Connect Invest has funded development, acquisition, and construction loans across the commercial and residential real estate sectors.
Looking Forward to the Future
The future is bright for Connect Invest and our investors. The real estate market is improving, and experts predict that the Federal Reserve will lower interest rates in 2024, meaning that mortgage rates will respond in kind.
As we transition into a calmer market, this will be the ideal time for real estate investors to get on board and diversify their portfolios. The market will see the return of buyers and sellers, and investment opportunities will abound. Our model and strategies are ideal for beginners and experienced investors in real estate investing.
Start here to begin your Connect Invest real estate debt investing journey.