#216 How to Passively Invest in Real Estate Through Notes ft. Nathaniel Agnini of Aloha Capital - Passive Income MD Shop

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#216 How to Passively Invest in Real Estate Through Notes ft. Nathaniel Agnini of Aloha Capital (1)
Episode #216

#216 How to Passively Invest in Real Estate Through Notes ft. Nathaniel Agnini of Aloha Capital

In this episode, Dr. Peter Kim explores passive real estate investment through notes with guest Nathaniel Agnini from Aloha Capital. Join them as they explore the ins and outs of note investing, covering topics such as understanding Aloha Capital, loan qualification processes, the advantages of note investing, and the current market influences affecting this investment strategy. Stay tuned for valuable insights on how to navigate the world of real estate notes and optimize your investment portfolio.

Aloha Capital brings this episode to you…

Aloha Capital offers investors high-yield, passive income via real estate notes. Investments are backed by 1st position mortgages to seasoned real estate investors who personally guarantee the note.

Through Aloha’s platform, you can select specific notes that deliver a 9 to 14% annual return with a minimum investment of $25,000. With 4,000 loans and $600 million principal, earning passive income becomes effortless.

Click here to learn more about ALOHA CAPITAL

Are you looking for a community to encourage you as you begin, or want to accelerate your business to the next level? Then join thousands of physicians who share the same journey of creating their ideal lives through multiple streams of income by joining us in our Facebook communities such as Passive Income Docs and Passive Income MD.

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28.12 Min • June 17

Episode Highlights

Now, let’s look at what we discussed in this episode:

  • What is Aloha Capital?
  • How to Qualify for a Loan
  • Benefits of Note Investing
  • Current Market Impact on Note Investing

Here’s a breakdown of how this episode unfolds.

Episode Breakdown

[01:21]

What is Aloha Capital?

Peter begins by introducing Nathan along with Aloha Capital.

Nathan shares that Aloha Capital is a private money lender for residential investment real estate nationwide, financing properties for rehab, buy and hold, or value-add projects. They lend to assets nationwide and offer opportunities for investors to participate in their funds or individual notes.

[02:10]

How to Qualify for a Loan

On the question about loans, Nathan shares how Aloha Capital offers their services and what the terms include.

He reiterates that Aloha Capital acts as a private money lender for real estate investors, specializing in higher-leverage loans for rehab projects compared to traditional banks. They offer loans with favorable terms such as 85% loan-to-value on the purchase and 100% of the rehab capital, incentivizing investors to use their funds for quicker scaling. The typical rehab loan term is 6 to 12 months with no prepayment penalty, allowing borrowers to refinance into permanent debt. 

Nathan highlights that Aloha Capital differentiates itself through personalized, high-touch service and a focus on borrower experience and track record rather than just creditworthiness when considering lending opportunities.

[05:46]

Benefits of Note Investing

Peter and Nathan proceed to discuss more about note investing, available through Aloha Capital. Together they talk about the intricacies of note investing and what benefits it offers.

Here’s a quick rundown of their discussion.

What is Note Investing?

A note investment involves a promissory note or mortgage against a borrowed amount, with the opportunity for investors to participate in the revenue stream. Investors can either buy the entire mortgage or opt for a partial investment, receiving distributions from the serviced loan. This concept provides a passive way for individuals to enter the real estate market, offering a potential means for diversifying investment portfolios and generating returns.

Why Invest in Notes with Aloha Capital?

Investors can leverage experienced firms like Aloha Capital to invest in real estate notes for potentially better returns and eliminate the need for individual underwriting. Investing in first-position notes through companies like Aloha Capital can provide secure annual returns of 10 to 15%, backed by collateral assets like single-family homes, offering stability and protection in case of borrower default.

Aloha Capital’s strategy for handling defaulted properties depends on their condition. The usual process involves rehabilitating the property and selling it to recover capital and potentially generate profits for investors. Proactively working with borrowers to prevent full default has led to a historically low default rate for Aloha Capital, well below the industry average of three to 5%.

Benefits of Note Investing

Investing in notes offers benefits such as passive income without the need for hands-on property management. It provides access to diverse markets and qualified borrowers, allowing investors to capitalize on professional flippers’ expertise. 

Notes offer liquidity compared to traditional real estate investments, with shorter investment periods ranging from 6 to 12 months. Investors can quickly reinvest their returns or allocate funds to other opportunities. While note investments yield regular interest income, high-net-worth individuals can leverage self-directed IRAs for tax advantages. 

Additionally, upcoming REIT offerings present potential tax benefits for investors in the note space.

[19:53]

Current Market Impact on Note Investing

To conclude, Peter asks Nathan about note investing with the current market turbulence, wondering if it is a good option to consider for those who are interested in investing.

Nathan shares that investing in real estate notes offers passive income and liquidity, with a focus on consistency, risk mitigation, and adaptation to market dynamics such as interest rates and inflation. 

Professionals in the field emphasize experience and stringent criteria in finding deals, aiming for sustainable profitability amid market challenges. Platforms like Aloha cater to both accredited and non-accredited investors, with options like the Aloha limited income fund targeting accredited investors and Swell Investments offering customizable portfolios. 

Transparency and support are key features, enabling investors to select high-quality notes and receive guidance through platforms like Swell Investments and Aloha Private Lending.

Kinds of 1031 Exchanges_Improvement Exchange_Reverse Exchange_1031 Tax Implications & Rules_Lazy Man's 1031 ExchangeWe talk in depth about all of this and more in our course–Passive Real Estate Academy. Want to learn everything about investing in real estate with confidence? You can grab your seat right here!   

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