Safeguard: Important Update

Real Estate Markets in Transition

We began offering 1st lien trust deed notes for Self Directed IRA & 401(k) investors several years after the housing collapse of 2008-9 when potential investment properties were plentiful and prices were cheap.

Over the past 6 or 7 years, a vast inventory of distressed and foreclosed single family homes was absorbed by individual all-cash buyers and hedge funds that bought large portfolios from banks and smaller scale investors.

It's early 2016 and the single family rental housing market has changed dramatically. Dwindling supply, higher prices and competition in larger markets have made it virtually impossible for some of our local partners to continue to do business as usual.

First to feel the impact in late 2014 were our local partners in Atlanta, Houston, Dallas and Memphis and by mid 2015, the Orlando market was feeling the pinch.

These partners simply are no longer able to buy properties at a discounted price, rehab and offer at a price that fits within our lending criteria.

To compound the issue, some banks in these markets are now willing to loan money to investors/borrowers at a lower rate and more favorable terms.

Shifting Focus to Secondary Markets

We weren’t caught off guard with developments described above and we fully expected this would occur as markets around the country recovered.

In fact, by early 2015, we had already shifted our focus to secondary markets that are economically stable and not experiencing the affordability and acquisition issues in larger markets.

As stated in our previous email update, in 2015 we added several partners who continue to be highly successful in their local markets with acquiring, rehabbing and managing single family rental homes.

Current operational markets:

• Jackson, MS $27,000 to $40,000

• Kansas City, MO $35,000 to $50,000

• Toledo, OH $45,000 to $70,000

• Chicago, IL $75,000 to $90,000

* San Antonio, TX: We previously anticipated that new construction home loans would be available on a limited basis in 2016 but have since revised our projection for availability to mid-2017.

Here’s What You Should Expect

The good news is that our business model continues to work very well with more than 500 private loans representing about $25,000,000 on roughly $40,000,000 of value in single family rental properties. (Most of this activity is in secondary markets.)

Acknowledging that there is downward pressure on interest rates in the investor market, we have been able to maintain the same 5 year, 9% interest-only loans that we have always offered.

Even though the inventory of notes range from $27 - $90,000, you should expect the average note to be around $40,000. In other words, there are many more notes in the $30 - $45,000 range than in the higher range.

For investors who want notes in the higher range, we can easily package 2 smaller notes that will meet the same criteria.

Summary

Larger real estate markets get a lot of attention resulting in dwindling supply, higher prices and more competition. What that means is “diminishing return on investment” in proportion to these factors.

Smaller markets don’t get as much attention, and therefore actually outperform larger markets when it comes to cash flow and rent to value.

So, don’t be put off by secondary markets. Professional investors have long known that these markets are not subject to speculation or big spikes up and down in value. It’s the right place to be.

Get On The Waiting List

Call or email Brandon Reed or Corey Fleetwood to get on the waiting list. It shouldn’t take more than a couple of weeks to match you up with a note that meets your lending criteria.

Remember, our 1st lien trust deed notes can be held inside a Self Directed IRA & 401(k), but you may also use after tax cash to hold the notes. Go to www.SafeguardCP.com for more details.

Brandon Reed
Director of Operations
brandon@safeguardcapitalpartners.com
877-280-5771 x 240

Corey Fleetwood
Client Relations Manager
corey@safeguardcapitalpartners.com
877-280-5771 x 220

Best Regards,

Robert Hubbard
Managing Director

Safeguard Capital Partners
A Morningstar Holdings, LLC Company
www.SafeguardCapitalPartners.com
Office: 877-280-5771 x225
Email: robert@safeguardcapitalpartners.com