Jun 13 2018Add to Favorites
With the global interest rate environment at all-time lows and banks paying a meager annual rate on savings, which is typically lower than the inflation rate, investors are having to search for opportunities to make their capital work harder. Balmain Private has created a digital concept where the group originates low Loan to Value (LVR) senior debt for real estate assets, which investors can then participate in via a digital platform. Balmain Discrete Mortgage Income Trusts provide investors the ability to invest alongside or “pari-passu” to Balmain, in individual, first mortgage secure loans.
Managed entirely online, the loans have already been originated, approved and funded by Balmain, are fixed term and get a significant participation from Self Managed Super Funds.
“We have over $200,000,000funds under management currently with about 950 individual investors,” Says Balmain Private head of Distribution, Tom Sherston.
“The minimum investment in any loan is $10,000, with typical terms ranging from a few months to three years, with the average net return so far sitting at 7.86 percent, paid monthly”.
Of the Loans repaid 46 percent have exceeded their Target Rate of Return, while the rest have met theirs.
A residential investment in Brookwater, Queensland, of $5,000,000 over three months, earned a return of 10.34 percent, based on a Target Rate of Return of 7.65 percent. Security on the loan was a first registered mortgage General Security Agreement (GSA), guarantees and indemnities from the director and related entities.
In Wetherill Park, NSW, an investment into a commercial development site met its 10.50 percent Target Rate of Return, following a three-month term. The loan amount was $4,471,000, with an LVR of 62 percent.
A $2,700,000 loan on a commercial/residential investment in the ACT exceeded its 10 percent Target Rate of Return, earning an actual return of 11.25 percent over a four-month term.
In Greenvale, Victoria, a $2,100,000 loan over a five-month term, met its Target Rate of Return of 7.6 percent. The security on that loan was a first registered mortgage, GSA, personal guarantees for the full amount of the loan plus interest.
Segmenting the population by generation is part of popular culture. The generation that came of age in the 1970s is very different to that of the 1980s or 2000s, having grown up with different technology, political and social events.
When the market gets difficult as it is currently it makes you step back and re-assess. Whilst you can do all of the objective commercial assessment in the world, key drivers are ultimately emotional and psychological. Fundamentally it is your "why" that governs your "how". The strength of these emotional and psychological drivers is what gives you the ware withal and grit to know when to hold, fold, walk away or run.
A few years ago I watched an ESPN documentary on NBA and NFL players and this phenomenon how when their careers are up after their moment in the sun, most, 60% and 78% respectively, end up financially destitute. When you think about the fact that most of these professional athletes earn more in just a year of their career than what most of us will earn via our working jobs in a lifetime, yet end up with nothing, it is really a really interesting phenomenon. On the other hand, there is the story of the UPS worker who never earned more than $14,000 a year and invested consistently, amassing a fortune of $70 million over his lifetime, $36m of which he donated to education-based charities to support young people getting a quality education.
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