Most investments can be categorized as either debt investments or equity investments. In an equity investment, you buy an asset and your profit is related to the performance of that asset. When we acquire an apartment complex, your profit is based upon the net revenue.

​

In a debt investment, you loan money directly to a business, developer or person who in return must pay it back. With a debt investment, your profit is not directly related to the performance of the borrower. On the other hand, there is always a risk with debt investments that the borrower will be unable to pay back the debt.   “Loan money directly to a business, developer or person who in return must pay it” back

​

Equity based investments are seen as higher risk and therefore typically earn a higher rate of return over the long term. This is why we even bother with equity-based investments, instead of putting our money into (theoretically) safer debt based investments.

​

Debt based investments are seen as lower risk and therefore usually earn a lower rate of return (again, over the long term). However, debt based investments struggle against a hidden risk — inflation. Many debt based investments offer a rate of return which is less than the rate of inflation.

​

Debt based investments still serve useful purposes in the financial world. They are often used to temporarily “park” money while waiting for a desirable equity based investment to become available.  Take a look at our available investment opportunities.