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What’s up, everyone? Today, we’re covering the interview Lincoln Archibald had with Nic DeAngelo from Saint Investment Group on Fixed Income Strategies!
Hopefully, this blog is finding you with your feet up and your belly full – Happy Thanksgiving!
Saint Investment Group has $206 million Aum in private real estate and prides themselves in dependability, flexibility, and performance, while providing monthly distributions to investors for the past 10 years.
Lincoln: Nic, tell me about Saint Investment Group!
Nic: Saint started off on the acquisition side of the business handling investments of high net worths and family offices.
That group grew until we were able to add an asset management arm to our business.
We have exited 7 projects full cycle, averaging 35.5% IRR overall!
We have 19 projects in progress today, that are projected to realize around 31% IRR.
Right now, we’re focusing on a fixed income strategy for our investors, which provides more dependability.
Lincoln: So, you’ve got a syndications business, a fund business, and an asset management business that services those properties.
Let’s talk about your funds. How many funds do you have?
Nic: We started out in acquisitions because that was my expertise, just doing deals one by one, but the ultimate goal was to transition to the fund model.
We’re focusing on the fixed income approach and the growth approach now.
We have a 12-month lock-up period with a fixed income of 8%, meaning the investors are guaranteed an 8% annual return, which is paid monthly.
Our fund is open-ended, meaning the investors have the option to leave their money in the fund in perpetuity.
Lincoln: Tell me about the assets held that are generating this constant return.
Nic: We focus on real estate debt because we need a system that can pay consistently.
These US residential mortgages provide income consistently, even thru recessions.
500 of these 20 or 30-year mortgages have competitive rates that can provide yields that double the bank, but are also very flexible.
Lincoln: How are you sourcing these deals?
Nic: Well, we started out by purchasing distressed assets, mostly disclosures.
After so much interaction with banks, we started to be viewed as a reliable buyer.
After some time, our team realized that we didn’t love owning these homes, but we loved to have residential debt.
So, just recently we found that the fund model was a great vehicle to package all 500 of our mortgages.
And we weren’t getting market deals passed along through Costar, all of our acquisitions came from the relationships we had formed with banks.
Lincoln, let’s say you wanted to go buy a beautiful multifamily building today from an institution.
Once that institution sells it to you, mostly all of the risk is out of their hands.
Lincoln, you’d be the owner of that property and its related risks.
But, that’s not how debt works.
If Wells Fargo sells all this debt and it defaults, the “blame” is put on Wells Fargo instead of the no name entity that bought it from them.
I’m trying to say that reputational risk in the debt space is huge. Responsible relationships become so important.
Lincoln: Nic, this asset was probably more attractive a few years ago than it is now. Currently, we can go buy treasury bonds in the high 5%’s. How does this sit with you and your investors?
Nic: Well, we work with very sophisticated investors. This means that they know the difference between a 5% return with the government and an 8% return with us. That’s a 60% jump!
However, when we tell them that they don’t need to pay any management fees and that we haven’t missed a payment in over 10 years, they realize that ours is the better investment for their portfolio.
That’s all we’re covering today, but go to Funds that Won to listen to the rest of the conversation!
Big thanks to Lincoln and Nic from Saint Investment Group for the content today!
If you’re ready to make the jump from syndications to a real estate fund, then visit Fund Launch!
Thanks for stopping by,
Want to get direct guidance for your fund? Schedule a time with my Fund Advisors!
DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the author
