Real Estate

When it comes to creating and preserving wealth, property has always been the asset class of choice. Today about 49% of the world’s wealth is held in property, but it is out of reach for most people.

This is why Wealth Migrate has made it its mission to give more people access to this prized passive income stream. At present only 12.9% of people have access to investing in property, but Wealth Migrate wants to increase that to at least 25%. “We have a goal of helping the 99% have access to the same opportunities as the top 1%, using technology and SMART InvestingTM,” says Scott Picken, the founder and CEO of Wealth Migrate and the founder of International Property Solutions.

“Our mission is to give access to everyone who is like-minded and understands the power of the crowd working together, just like in nature. As when birds fly in a flock, versus flying on their own, a bird in a flock can fly 70% further than a bird on their own,” he says.

Property provides investors with a steady stream of passive income, but it can be a tough asset class to crack. Wealth Migrate helps to break down many of the barriers to entry by using an online platform that connects investors and property partners without the added cost of countless middlemen, and then allows investors to invest directly in property in the UK, the US and Australia and earn a US dollar, Australian dollar or pound based passive income.

Picken is quick to point out that the investment is directly into an actual property – investors own a piece of a building – and not a real estate investment trust (Reit). This is what the wealthiest people have done for centuries and there is a reason that there is a saying, “He who owns the land is King.”

Traditionally it has been difficult to get into commercial property – the middle classes invest in residential, while the truly wealthy favour industrial and commercial, says Picken. Wealth Migrate gives individual investors the buying power of an institution, and therefore access to commercial and industrial property.

With this investment comes a passive income. “Passive income equals freedom. Whether it’s $15,000 a month or $1,000 a month $50,000 I don’t care what your number is. What I do care about is enabling you, giving you the belief, the knowledge and the systems to make it work for you,” says Picken.

Technology has been the big game changer; in the same ways that Uber has changed the way we hail a taxi, Wealth Migrate’s online platform has made investing directly in property more accessible, with more trust and transparency. It really is as simple as 1, 2, 3, 4, says Picken:

1. First, sign up;
2. Then browse the deals you now have access to;
3. Once you have made a choice, invest, using the fin-tech enabled platform; and
4. Go ahead and manage your growing portfolio.

It may be easy, but Picken preaches caution. Any deal brings risks, he says, but Wealth Migrate does extensive due diligence – both on the partner and the deals. The three absolute must-haves for every partner are:

1. They must have been around for more than 10 years;
2. They must stick to one thing, old-age care or medical for example; and
3. They must put their own money into the deal.

For further information and to register visit https://online.wealthmigrate.com/wealth-breakfast.

With all the uncertainty in South Africa, everyone is looking for a safe solution to invest their money overseas.

There are 3 primary reasons for this – Wealth Preservation, a Plan B and Peace of Mind for them and their family. There is also the pure financial reason due to the Rand losing an average of over 6% against the USD every single year for more than 30 years (basically this means a 12% return in South Africa is like a 6% return in America in real terms).

So, if it was safe and simple then it seems a no brainer…

Unfortunately, more than 80% of people who invest overseas actually LOSE money as it is a lot harder than people think.

How to start building a global portfolio Scott Picken started helping people invest internationally in 1999 and has now helped thousands of South Africans invest in America, Australia and the UK. Originally, he started helping them invest directly into houses and apartments with International Property Solutions (IPS) and in the last 6 years they launched the platform called Wealth Migrate. The platform allows investors to invest directly with partners on the ground. This cuts out the middlemen, cuts the costs and allows investors to invest in a trustworthy, transparent and accessible way in first-world markets. As Picken says, “Before technology, this was not possible. You had to fly to London, set up a structure and bank account, get a mortgage and then have the endless hassles of managing the property. Now with technology, in literally a few minutes you can get access to the best opportunities, with trusted partners and, on the first Wednesday of every month, you can invest from $1k. Technology has transformed the way you catch a taxi with Uber, why not use the same convenience with your investments?” Wealth Migrate has members in 133 countries, has had more than $90m invested through the platform and facilitated property investments of over $560m. These deals have consisted of residential buildings in London, medical office suites in America, industrial buildings in Australia, a Thailand resort and many more… With cash on cash returns of roughly 8% in America and IRR’s of greater than 13% in first-world currency, this is certainly something South Africans can consider. For more information go to www.wealthmigrate.com to understand how you can become a Global Citizen and build a global portfolio – safely and simply.

I’ve recently returned from Sweden where Midsummer Celebrations and raising the Maypole are a great example of collaboration. Collaboration is working with others to do a task and to achieve shared goals. Collaborative investment is working with others to achieve the funding required to reach a shared goal.

When it comes to investing in Real Estate or Property, there are many different ways and many types of investment vehicles that can be chosen.

Lets look at a couple of investment areas:

REIT’s

Real Estate Investment Trusts (REITs) have becoming increasingly popular in recent years. These are specialised Mutual Funds, focused on investing in real estate and are essentially securities that can be traded on stock exchanges and are therefore quite liquid.

REIT’s are aggregated investments, meaning multiple investors are gathered together to invest in a collection of aggregated investment opportunities in one vehicle. An individual or an entity usually gather the investors and and opportunities in a REIT environment. This is in contrast to a collaborative investment where a group of disparate individuals work together with others to achieve the funding required to reach a shared goal.

With REIT’s, and the liquidity they have as listed securities though, there can be heightened risk. REITs are correlated in financial percentage terms at around 70% with the stock markets. This means their value volatility is often dependent on general market sentiment.

Collaborative SMART Investing™️

Investment was once only the domain of Kings, Dictators and Industrialists.

The First Wave: Once upon a time, before the 18th century, large scale financial and infrastructure endeavours were the domain of royalty and dictators.

The Second Wave: Things changed with the Industrial Revolution. This took place from the mid-18th to early 19th century in certain areas in Europe and North America. Industrialisation shifted this power to orchestrate large scale financial and infrastructure endeavours to a few citizens, the industrialists.

The Third Wave: Today though, Joe Citizen can drive large scale financial and infrastructure and Real Estate endeavours through joining with others on a Collaborative Investment Platform like WealthMigrate.com

Lets look closer at the word Collaboration.

• Collaboration is working with others to do a task and to achieve shared goals.
• Collaborative Investment is working with others to achieve the funding required to reach a shared goal.

Since the Global Financial Crises collaborative investment is becoming more and more centre stage. Mostly because Government budgets have tightened and banks are simply not lending as they did before.

Essentially Collaborative SMART Investment™️ utilises the knowledge and experience of industry experts – practitioners or partners in specific industries, countries, and markets with specific product knowledge, platforms or marketplaces and their systems and their purpose driven mission. 

The speed at which technology is moving heralds an era when disruption is creating a time when there’s never been a better time to begin investing in real estate. There are many options available and it all comes down to risk tolerance and the amount of capital you want to invest. 

When conducting your risk analysis, consider Collaborative Investment Platforms like WealthMigrate.com and their offerings. Technology is disrupting the real estate investment space so that it is simpler, safer, easier, quicker to invest. It is also more personalised and eliminates up to 10 different middle men in the investment process. 

Collaborative SMART Investment™️ is making investment transparent, trustworthy, robust, safe, sustainable and global where all parties interests are aligned.

NB: Book here for Mumbai India – 6th August 2019 Presentation by Scott Picken and Paul Niederer

Our trusted partner, OrbVest, has recently been in the news. Read the article below. To view OrbVest’s currently offerings, go to our platform and sign up/log in.

South Africans who are actively seeking offshore portfolio diversification have warmed to the niche-focused entrepreneurs who are building Orbvest into a billion dollar powerhouse. They are taking experiences learned in the specialised SA’s medical property sector and applying them in the US market, with CEO Martin Freeman having relocated there. The latest development, their 22nd, was oversubscribed, with the excess being allocated to the 23rd project described in this interview by director of operations, Justin Clarke. He was interviewed on this week’s episode of Personal Finance Live. – Alec Hogg

Listen to the podcast here: https://omny.fm/shows/biznews-radio/booming-demand-from-sa-investors-brings-pressure-o

We’re talking about property today and particularly investing in property in the international arena. Justin Clarke is one of the partners at Orbvest. Those of you who’ve been following Biznews, will notice that we’ve been giving a bit of attention to Orbvest for very good reasons. A group of entrepreneurs who got together, had their own money, decided they wanted to invest offshore, started in the area that they understood in the United States and now they’re onto project Number 23. I don’t want to steal too much of Justin’s thunder… Justin from the information you sent me in preparation for this discussion, you said that you closed off what is called Glen Ridge Medical 22. What exactly was that and why did you close it off?

Thanks for having me on this afternoon. It’s great chatting to you and your audience. We started five years ago and it took us a long time to close off these investments. It was difficult to establish trust with new investors. I think that we’re now getting to that tipping point where we are listing a project, which actually closes within a very short period of time. We have a regular following of investors and the word is now starting to spread. So the short story is Med 22 was a huge success. We actually listed it yesterday. What that means is that the investors all move their money and we were able to list the property on the exchange and then the money would flow through to the actual company that does the transaction in the US. So yes, it’s happening at fantastic speed at the moment.

Just unpack for those who perhaps didn’t follow the story. What exactly do you focus on in the United States?

You touched on it earlier. The problem that we were trying to solve is where to invest in something that is tangible and that is recession resistant. Yes, you can invest offshore in a fund but you don’t necessarily know what’s happening behind the skirt. We do have a property focus, my background is very much in property, as are some of my colleagues. We decided that the US, and the US economy is still pumping and it’s an economy that we understand. Then we looked at what category to invest in. There are a number of different opportunities in the States. We know that some of them are under pressure like retail real estate but this medical thing – we have some IP, my partner Hennie Bezuidenhout has been doing it in South Africa for many years, as you mentioned and it is very recession resistant. We decided to get a hyper-focus on this particular category. So what it means is that we find these buildings in the US, in states and cities that are growing phenomenally, that have a diversified economy – they’re not reliant on any one particular thing like oil and then we identify partners on the ground. We acquire the building, we take out a loan, we get some leverage and then we raise money from investors around the world to take up the equity portion. A typical building would, be let’s say $10m. We would add a $3-4m equity investment and the rest would be leveraged from our financial institution. That’s basically how it works.

So Glen Ridge Medical 22 means that you’ve done 22 of these projects.

There’s 22 individual buildings yes. A few of them have been lumped together into portfolios.

And now that’s closed. You’ve got all the investments you need on that side. Now you’re opening number 23.

We’re accelerating. 23 is a small building. It’s an absolute plum. To give you an idea, this one is moving out of our traditional area and into the Newark New Jersey and metro area which is just outside New York. I think diversification is another thing that’s super important. We didn’t want to have too much risk in one particular area. It is a small building that is 100% tenanted by pretty much blue chip tenants, which is the Hackensack Meridian group – a massive hospital group, I think it’s the biggest hospital group dominant in the Tri-State area and they have a long term lease. So it is absolutely safe in that you just have to wait for a dividend to be paid every quarter because the rental will be paid. It is a substantial tenant. And then of course, at the end of the five year period we will sell-on this building and the investor gets the opportunity of participating in the capital gain.

How long is a long term lease by those standards?

They have a new 10 year lease, which they have just signed and that’s renewable for a further 10 years.

That’s a 10 year lease by a blue chip hospital company in a medical building. Have they taken the whole building that you’re requiring?

Yeah. It’s in fact a condo building. So there’s two components to the building and there are some other small tenants with a wonderful symbiosis. If you have a substantial anchor tenant like that in a retail establishment, then the other tenants want to come in. When it comes to this particular building, there is a small ophthalmology or optometry business that rents some of the building.

We have covered a lot of the advantages of investing in this kind of a property investment. But how have South Africans taken to it? Clearly you and Hennie Bezuidenhout and Martin, and the entrepreneurs who started it are boots and all in here. But what about other South Africans, are they warming to the idea of investing in medical properties in the US?

This business is predominantly been for South Africans. We love the idea of helping South Africans to diversify their risk out of South Africa and we have a substantial amount of South Africans. We are in the front of a wave, people are looking urgently for alternate opportunities offshore in solid currencies. So, yes there is a phenomenal response from the South African market at the moment.

How difficult or easy is it to actually make the investment? I see that you talk about a minimum amount of $5,000, which is pretty much in everybody’s scope, but how do you get that money invested into Orbvest or in this particular instance the new one that you’ve just opened, the Meridian medical number 23?

That’s a great question. When I went over in 2012, to look at real estate in the US for the first time, I eventually didn’t make the investment. At that stage you could buy a single residential house for $10-20,000. It was just after the global financial crisis. One of the problems that my colleagues have solved phenomenally well, is to make this really easy and really tax efficient. We can process it on an online platform where you can go online and you can actually invest as little as $5,000 and then we take care of the rest. We’ve made it super easy for investors to be able to participate. You don’t have to worry about the structures. Previously you’d have to set up a company or an LLC overseas. You don’t have to do that. You can invest from South Africa in your personal capacity, we made it so that it’s super easy to do that.

Then what kind of returns are the guys in projects number 1 to 22 been achieving?

We initially had expectations that we would need to provide 8% plus – cash on cash and that means that every quarter you would get roughly 2% paid back into your, what we call a wallet, and we’ve been maintaining that over the last five years. There is a lot of competition in the market as you can understand – America’s awash with capital at the moment. So we’re finding it harder and harder to find new buildings. What is interesting is this. The New Jersey property which we’ve just listed was slightly lower than that. It’s 7.7% cash on cash. We thought there might be a resistance because it was below 8 and as I say, it has been pretty much fully subscribed in the six or seven days.

Fully subscribed. How much investable stock was there?

So this one is particularly small. There was only $2m of equity available. We did expect it to go very fast and there is a small opportunity because although it is fully subscribed, we have to wait for people to move their money. If it’s a South African they have to go by their bank, sometimes the Reserve Bank application. So there is a delay and it’s very much a first come first situation. So yeah, there’s a small opportunity.

$2m of equity that doesn’t sound like a very big building, have you leveraged it? Have you borrowed to support that?

Oh yes absolutely. This building I think was in the region of $8m total investments. We always get the sponsor – somebody in the US who has to sign for the debt, or a general partner if you’re talking VC who sign for the debt and we require them to have skin in the game. In this case, the general partner or the sponsor has put in his own equity to make up the difference.

So how much equity have your South African investors got and the sponsor? In other words how much skin in the game do they retain?

The South African investors have put in the $2.1m, then the sponsors put in about $1.8m each.

Okay, so they do definitely have skin in the game. When is number 24 – given that you guys have got big ambition?

We’re certainly putting some pressure on the acquisitions team to find some really good properties but I’m pleased that we’ve got a bunch of them. The difficulty really is getting the timing right. We like to release one, close it and then move to the next one, but there are three very exciting opportunities. They’ll probably both be mid-August.

If I remember correctly, Martin Freeman your partner, actually lives in the US, in New York and manages the on-the-ground engagement negotiations etc?

Yes. Absolutely. Martin and his team. I suppose you would normally be talking to Martin today but he is in Israel. We have a big project which is open to institutional investors and they have a lot of interest from a couple of Israeli investors. So him, Hennie and our acquisitions guy are in Israel at the moment.

This is an amazing story Justin. It’s almost like when I was a young journalist, I remember the old timers telling me that they gave Anton Rupert money when he first started Rembrandt or other people saying they put money with Donald Gordon when he started liberty. Do you think it’s gonna be something like that? Are people gonna turn around and say I put money into Orbvest when they were still $200m in the US?

I’d love that to be the case. I think that we have a slightly more humble approach. We do want to build a billion dollar fund and Martin did describe that to you when you interviewed him the last time, but absolutely. If we carry on doing what we’re doing at the moment – we are obviously opening up pipes to other countries which is very important. We don’t want to be completely reliant on South Africa and something that we’ve learnt that’s super interesting, is that we’re not alone. If you think about a lot of the countries in South America, we’re getting investment now from Brazil for example. They have all the same challenges that we have. They need to look for secure places to put their money offshore, just to make sure that they have diversified their risk. I certainly hope that we can create another Liberty.

Well it’s very good chatting with Justin Clarke and you can be sure we’re going to be following the story of Orbvest very closely. Interesting that they’ve now gone into Israel as well, for institutional investors. Just by way of background Hennie Bezuidenhout is very well known in the South African property sector. He’s done exactly what they do now in the US. Property investment specialised in the medical field so he comes with all of those insights and then Martin Freeman who lives in New York, who’s the chief executive of Orbvest and he’s the guy who Justin said we’d ordinarily talk to, is now in Israel putting something together there. He is the man who started a very well-known company in South Africa called BayPort, which is part of Transaction Capital. So these are successful entrepreneurs. Justin himself started Private Property which I think many people will recognise as well.

In this week’s episode of Rational Radio, Martin Freeman, a successful South African entrepreneur and now New York-based CEO of Orbvest, unpacked the strategy behind the $200m fund that’s yielding 8% a year. He shared a fascinating story of a team that have successfully transported their SA template of investing in highly specialised buildings that host medical professionals.- Alec Hogg

Listen to the podcast here: https://omny.fm/shows/rational-perspective/sa-entrepreneurs-open-orbvest-to-others-us-medical

Martin Freeman is now based in New York you’re in South Africa at the moment.

I am yes I’m visiting my offices.

You guys have got quite an extraordinary story. I guess many people in the country will remember you as an entrepreneur who started Bayport and then went into other things. You went to the United States and then with together with a couple of other South African entrepreneurs started Orbvest, with a very specific intention. I guess to start with, to look after your own money…. but just unpack what you guys are doing over there.

Firstly, thank you for having me on your show today. My story is that I am a serial entrepreneur and have been starting businesses and growing people in the businesses for over 30 years and I grow into large scale. So my journey with all this began in 2012 when I was privileged to attend an executive management program at Harvard in the US and became interested and determined to invest in real estate in the USA. I met my current partners at this time, who were also following a similar journey of helping South Africans invest in real estate in the US over the past five or six years. We have carved out a niche where we are interested in stable income producing real estate assets – specifically in healthcare needs. We’ve assembled a portfolio under management of over $200 million.

The United States? It’s a huge market. I can understand when you say medical services because one of your colleagues – has done very well in that here in South Africa but where do you even begin in a big market like that?

You’re absolutely correct. The starting point is you have to define an area of focus and you have to say where you want to invest in the world. I think it’s clear to most people that the US remains a very dominant economy and a powerhouse. And the next part of it is which niche. Initially my team were also involved in houses to rent and in the USA and there’s a reason why we’ve ended up settling on healthcare. And once you’ve settled on your strategy the next is which part of America. We are very decisive, we go for metropolitan areas where it’s landlord friendly where there’s a growing population. That’s the way you start. However you are correct, it takes a long time to build relationships and a network on the ground and to make sure that you partner with the right people. We have the experience and what’s most amazing is that we’ve been generating 8 percent cash on cash dollar dividends for our investors around South Africa and the world – going on six years. Bearing in mind we also we have investors from nearly 10 countries who invest into these properties along with South Africans.

You’ve been doing it for six years. You’ve been investing into medical properties and that’s in US dollar terms. It seems like a fantastic return when you have a look at what inflation is in the US. Why is it that that you can generate those kind of returns and just how risky is it?

Well the first thing is why health care. What I always like to say to people is think about your doctor or your dentist, anywhere in the world. How many times have they moved in the last 10 years and the answer is generally once or never. They are very stable tenants so you end up with tenants who have long leases. It’s a very sound investment. The building has been there for the past 10, 20 years. It’s going to be there for another 20 years.

We have been generating these returns, because we found through our partners on the ground, where we can add value to it. We have very stable tenants. What’s most interesting is when I was in South Africa, which I think most your listeners will appreciate, I was a private client of two banks and I was always informed that you will be able to earn five or six percent overseas and euros or dollars was a great performance.

We’ve been doing it for five, six years and people can also invest as little as five thousand dollars. So it’s an amazing opportunity. They’re able to generate these kind of returns that are very stable in a great asset class in the USA, because they invest directly in the building not into the fund. So they are in each separate building which is ring fenced. We would like to continue to help thousands, tens of thousands of South Africans all build a portfolio in the USA without having the associated risk.

But we’ve seen so many people getting ripped off from South Africa. If it’s not the Steinhoff and now there’s a cloud over Tongaat and in the United States you’ve had Bernie Madoff. How do people know that you guys are legit? 

So what we do is each property is separate and it’s own little vehicle. We’ve got the methods to be able to invest completely into the USA. We’ve been doing this a long time and it goes into a separate structure where you are an investor in that. You want to put five thousand dollars into a building, you choose your building. You don’t have to go into every building. You pick and choose. Number two, we disclose all the revenue that comes in – like you owned a building in South Africa – every month every quarter. Whatever’s left over from a profit perspective goes out as dividends. Because these are already income producing assets, it’s not likely that they’re going to change much. Your revenues are pretty much picked for the next seven to 12 years. That’s how long these leases are. And so are your expenses because as you said the US has got such low inflation, they have very stable buildings. Your payment and your dividends are stable and that’s the reason why we’ve got hundreds of raving fans in South Africa who continue to just sing our praises.

How did you hit onto this idea?

I would say that through my journey of actually wanting to invest in the USA I met my partners. They actually had gone through the various asset classes. The truth is that we had two very strong partners in the business namely Justin Clarke from Private Property and Hennie Bezuidenhout’s been doing real estate in South Africa. And Hennie will tell you himself that he has never lost a tenant through a recession or a downturn which one of the key reasons you mentioned about the risk of going over to the US.

I’ve immigrated to the US because I intend to propel this business to a billion dollar portfolio from the current levels. And just like everyone else I’m just as concerned about giving your money to someone in America. It doesn’t work that way with us. We’ve got a team of salespeople and consultants who personally hold your hand. I am in America. You can have my number. You can come and meet me and see. I’m the guy on the ground with our reputation who says I’m here to look after your money. Try us even if you want to go in at only three thousand dollars. You’ve got nothing to lose. We will prove to you that it is a very slick operation.

Who do you have on the ground here in South Africa?

So we’ve got four offices. One in New York, we’ve got an office in Atlanta, who’s been in the game for 25 years. We’ve got two offices in South Africa in Centurion in housing and also our main office in Cape Town and the individuals involved. Bearing in mind that they have mainly been dealing with high net worth individuals for the past six years. And they’re skilled at being able to explain all the issues all concerns. I’ve heard it so many times over the years and how to make sure the money goes in compliance. You get paid out on a quarterly basis and we really do keep very close to our clients. We don’t intend to be everything for everyone but for those people who want to earn a solid dividend and I believe that 8 percent is an amazing performance bearing in mind that’s also only the cash on cash component. When we sell the building in five years time at a profit, that brings your overall returns to between 12 and 17 percent in dollars which is really superb. So you get to invest like the big investors and players in the world and generate and earn the same returns as they would.

Okay. So it’s a great return. You’ve got a lot of cash invested yourself. You’ve got other wealthy partners. Why are you opening it up to the public? I’m trying to find the catch in this….

This is very simple. In order to build a massive real estate portfolio you need equity. And in order to acquire these buildings we can and we have been approached by a lot of the very big players to take large amounts from them and invest into a portfolio with them. But for us, I’ve always built very wide distributions. And secondly we honestly believe in our legacy – if we can help thousands of clients not only in South Africa, but from around the world to build their own portfolios, what an amazing thing to be able to do. So…. to understand a typical deal, you get a medical office building it’s 12 million dollars, 8 million dollars is debt and 4 million is equity, 65:35 which is conservative. Then what happens is we raise that four million dollars. If you break it down you could think about it as 40 people each putting 100000 dollars into that ring fenced property real estate. However, we bring it right down to the lower levels, because we have a 70 percent reinvestment rate. That’s why I say, once people put a small amount in and try it, they actually come back and want to reinvest again and again. This has been going on for six years. So to all your listeners, I was the biggest skeptic in the world. How can you generate these kind of returns? You absolutely can. You’ve got nothing to lose even four to three thousand dollars and it comes back in dollars.

So if the rand weakens you get hard currency returns?

Absolutely. So one of our big things is to earn dollars offshore while you live in South Africa. And wouldn’t that be great. I mean think about our people that invested five years ago in the rand was ten eleven and twelve. Look at their returns now. So they’ve earned 12, 15, 17 per cent total returns which is a combination of the cash on cash and then the profit at the end and they’ve added depreciation in the rand.
And as I say, you know the other part of the business is we also do trips. People come over and we say come and look and touch the buildings. It’s amazing – South Africans own real estate you’re in such a safe asset class. And when they do and they come back and they invest we are very proud to say at this point I think we are sitting on about 100 percent conversion rate when people go over because they just wanted to do it. They just don’t know how to do it and they’re not given the opportunity.

You said the hundreds of South Africans you’ve invested with you already. What’s the typical profile?

So the typical profile is any person who has disposable income of even 5000 dollars. We have people from $5 000 right up to literally a million dollars. So we’ve got the ultra high networth guys who can do a million dollars per project. The bulk of our individuals are between 50 to 100 thousand and then we have people who over time have consistently invested 5000 dollars in every single project. My view would be to let them invest consistently and if we have a project every two three months wouldn’t it be great to own a portfolio of 10 medical office buildings in America each producing cash on cash great dividends for yourself.

How many projects do you have?

We’ve got 21 medical buildings so far and we have nearly one million square foot under management.

And can you sell – let’s just say I invest into one of the 21. Is there a secondary market?

So the normal real estate investment model is you invest and then you hold for five years. What has actually happened is that every single time someone has wanted to sell, the rest of the investors want to buy them out immediately. Because your biggest risk is when you put your money in on day one of the first or the second year when one of those call it 40 50 or 100 investors once you obviously sell the others obviously you want to grab it immediately because not only do they get the additional returns of the cash but they close it to the exit which means they get the better return cross they are close to also getting the profit. And so we’ve had a very very successful secondary market which we didn’t expect.

So the exit would be when you actually sell one of those to someone? You bought 21 buildings and you gonna be buying a whole lot more. If you’re going to become a billion dollar portfolio from 200 at the moment and when you get to the end of that period about five years you sell it to somebody else and reinvest. Why didn’t you just keep building?

Great question and it’s really up to the investors themselves because bearing in mind the investors own the investment and so we will obviously be guided by market conditions and also the exit. Very often most investors want to bank it and actually taste the fact that they’ve earned a profit. Don’t forget in America it is an amazing thing whereby it’s called the 10/31 you can roll your investment and not pay the relative taxes in the USA. It’s completely legal. It is used by all the real estate players in the US or you can simply pay your dividend tax and take it. So to answer your question after five years we could hold it further.

But most people would like to sell it and invest into another property as long as there is enough property which there absolutely is in the USA all the time reeks of buying and selling. And as long as we have a presence on the ground that we are able to acquire them, this model will continue to grow and grow. What separates us is that we bring that same amount of equity every month of the years going forward for the next five ten years to acquire real estate. Irrelevant of what is happening in the USA.

Martin Freeman is the chief executive of Orbvest and as you heard…..When I came across him I couldn’t believe it. And I started listening more and doing a little bit more research. Martin’s own track record is pretty impressive. Hennie Bezuidenhout’s the chairman of the company, is very well know in South Africa. Really what they’ve done is just taken a model that they perfected in South Africa and taken it to the United States and well 8 percent returns – good stuff.

OrbVest Investments’ and other partners 14th listing on our platform, Glenridge Medical 22, located in the Central Perimeter of Atlanta, United States, is 62% funded. The offering will be taking advantage of a well located 98% leased high-tech office campus in a strategic infill location by changing the rent roll to long-term medical tenants. The investment strategy from OrbVest on this offering is to unlock the potential of capital growth with stable quarterly dividends over the 5-year investment period. The equity investment of $5 million is available from $5,000. Watch the Offering Webinar below to learn more about the opportunity.

Here is a list of Scott’s recommended reading and courses from some of the most influential thinkers and doers out there:

Mind

• Think and Grow Rich – Napoleon Hill (I have the E-Book and audio book for free)
• Positive Intelligence, Shirzad Chamine
• The Code of an Extraordinary Mind, Vishen Lakhiani
• The Road Less Travelled, M Scott Peck
• Outliers: The Story of Success by Malcolm Gladwell

Life

• Principles – Life and Work, Ray Dalio

Goals

• Awaken the Giant Within – Tony Robbins
• The Four-Hour Work Week, Tim Ferris

Real Estate

• Real Estate Riches, Dr Dolf de Roos
• Property Going Global, Scott Picken (have to mention – smiley face)
• Commercial Real Estate Investing: A Creative Guide to …, Dr Dolf de Roos

Investment

• Unshakable, Your Financial Freedom, Tony Robbins
• Rich Dad, Poor Dad, Robert Kiyosaki
• Second Chance, Robert Kiyosaki 

Business

• Zero to One, Peter Thiel
• Exponential Organisations, Salim Ismail
• Bold, Peter Diamandis
• Behind the Cloud, Marc Beinihoff
• The Upstarts, Brad Stone
• Platform Revolution, Sangeet Paul Choudary
• Organizational Physics, Lex Sisney
• Scrum, Jeff Sutherland
• The Hard Things about Hard Things, Ben Horowitz
• Millionaire Master Plan, Roger James Hamilton
• The One Thing, Gary Keller
• Scrum, Jeff Sutherland

Leadership

• Turn the Ship Around, L David Marquet
• Multipliers, Liz Wizeman
• Legacy, James Kerr
• Lead with a Story, Paul Smith
• The Speed of Trust, Stephen R Covey
• Leaders Eat Last, Simon Sinek
• Pendulum, Michael R Drew
• Team Code of Honor, Blair Singer
• Getting to Yes, Roger Fisher
• The Five Dysfunctions of A Team by Patrick Lencioni

Sales

• Pitch Anything, Oren Klaff
• The Ultimate Sales Machine, Chet Holmes 

Biographies

• Finding my Virginity, Richard Branson
• Elon Musk, Ashlee Vance
• The Virgin Way, Richard Branson
• Jack, Straight from the Gut, John A Byrne
• Steve Jobs by Walter Isaacson

WealthE Bonus Resources

Blog Posts

• 7 Laws of a Real Estate Investor
• Direct Real Estate Investing vs REITs vs Syndication vs Crowdfunding vs Collaborative SMART Investing
• Does Wealth Migrate do crowdfunding, or is it more advanced than this? How do you 10x traditional crowdfunding…?
• How to be Wealthy?
• How to solve the Wealth Gap
• How to use technology to invest in local & global real estate, simple and safely from as little as $100 – turn Monopoly from a game into real life!
• Is real estate the new Gold?
• Exponential Technology Workshop & the $13 Trillion Dollar Real Estate Opportunity
• Why the emerging world is the future of Wealth? 

Life Hacks – save 20 years of finding the stuff I have found 

• Audible (audio books – first Two are FREE)
• YouTube – These are the channels which I subscribe to
• WealthE Insights Playlist – Wealth TV

Courses

• Business Mastery – Tony Robbins
• Date with Destiny – Tony Robbins
• Wealth Dynamics Masters – Roger Hamilton
• Mind Power – Robin Banks
• The Wealth Chef – Ann Wilson
• Health Dynamics – Jo Formossa 

As an investor, I often sit with a few options when trying to decide where to put the cash I was able to save from my last bonus cheque. Making a decision as to which option to choose can be difficult. I have a personal strategy – I like to have different kinds of investments (mainly shares and real estate), in different countries and at different risk levels. This strategy is now possible as companies like Wealth Migrate, and the equivalent tech platforms for shares, have made it easy for everyday investors to invest small amounts in different countries. 

When it comes to real estate, I personally tend to go with as little risk as possible – I choose existing buildings that have great tenants, and I know what kind of rents and income I will get. This means I often only get a smaller return, as I am not taking the risk or rewards of a new development. Friends of mine have done really well at times on new developments and often encourage me to try those options. Recently I have started dipping my toes into more risky deals, though not sure I will ever become a high-risk investor.  

However, the point I would like to share is that no matter what your personal strategy, it is important to be able to understand what the risks and rewards for each deal on the Wealth Migrate platform are so that you can choose deals that match your personal investment choice. This is why here at Wealth Migrate we have risk categories that we assign to each deal, helping you get a quick understanding of the risk. 

Core, Core Plus, Value Add and Opportunistic are standard terms to define strategies for investing in real estate based on the risk and return characteristics of an investment. These strategies have led to properties being classified according to which of these strategies they are likely to match. While these categories are mainly used in Commercial Real Estate, the principles apply equally to residential opportunities. 

One of the key aspects of the risk is the predictability and stability of your cash flow from rentals, now and in the future. The more uncertainty around cash flow, the higher the potential risk.  

Using this as a simplification for understanding the four strategies, here is a summary of the categories. 

Core

These properties are fully developed, operating at their maximum potential with little room for adding value through renovations, additions or change. They are in prime locations, with blue chip tenants and constantly fully leased. There is an existing rental income that is very stable and predictable, and least likely to be affected in an economic downturn. The value of these properties is tied directly to the existing rental income, and as such, any growth in the value only arises when there is a change in the underlying rental market. The returns on these properties is relatively low, as there is strong demand for these low risk investments, and people are prepared to pay higher prices. These properties are generally expensive and owned by larger REIT’s and funds. As the returns are relatively low, there is not a lot of room in the returns to make money after paying off any financing, so these properties usually are not heavily leveraged. 

Core Plus

This property category is similar to Core, though with one or two characteristics that may create a bit more risk or uncertainty around the cash flow. While there is relatively stable and predictable existing rental income, the property may be getting older, or it may be situated slightly further away from the prime metro locations. These aspects introduce an element of risk that the tenant base may be slightly more mobile or not of the same blue-chip quality. Given this increased risk, the price of these properties will be less than for a Core building. This leads to higher possible returns than the Core strategy, though with the additional risk. 

Value Add

As the name suggests, the value-add strategy involves finding properties with existing income from rentals, though where there is also an opportunity to add value to the investment through making changes to the property or tenant base. The changes could be renovating the buildings in order to achieve higher rentals or building new additions to the property. This class of property provides both regular incomes, as well as the possibility of increase future growth in the value through the improvements. However, with any value-add strategy, there is increased risk as the changes may cost more than expected, or once the changes are made they do not lead to the expected increase in rental incomes or capital growth. 

Opportunistic

This property category has the highest risk for cash flow and income. Deals generally involve turnaround situations or new developments. There is an inherent risk that projections for either the costs of the changes or developments or the expected income from rentals or the sale of the property after the changes have been made, may be wrong. It often requires bold investors to step in with a high degree of expertise to ensure a successful turnaround.  

Over and above the factors mentioned above, there are many factors that influence risk, and each opportunity will have its own mix and story. The key drivers that lead to a property being categorised into one of the four categories do not capture the complete picture. The property type, Sponsor’s reputation and experience, location, market fundamentals, business plan, and degree of leverage of just some of the factors that an investor should consider. 

While this all can feel a bit intimidating, investing is both fun and necessary. Having the right understanding of the risks is key, and these categories are a good starting point. 

Here’s to creating global wealth for us all.

This offering from International Property Solutions, 267 Upper Grosvenor Road, is currently 70% funded. This is a three-unit residential building in Tunbridge Wells, UK. The project is projected to have an IRR of 10%, and Cash on Cash returns of 4% with regular quarterly dividend payments. The offering will be managed by Crestwood Properties. For an in-depth discussion on this deal watch the Offering Webinar below.