Investing in Legal Funding

"Investing In Justice"  Author Max Volsky

Alternative assets have become popular in recent years, mainly because they offer superior returns and are uncorrelated to traditional markets.  Legal finance – also called lawsuit funding, lawsuit loans, pre-settlement funding, tort advances, plaintiff advances, litigation finance, litigation financing, litigation funding or dispute finance – refers to investments in lawsuits. 

Max Volsky's "Investing in Justice" is the first comprehensive overview of the legal funding industry. In this AIN interview Volsky talks about the history and evolution of legal funding and the current opportunities for investors.

DLA Piper 2014 State of the Market Real Estate Survey

DLA Piper

In a year when the US economy found its surest toehold since the Great Recession, commercial real estate executives responded with their most enthusiastic appraisal of the domestic market since DLA Piper first started measuring their outlook back in 2005. In our 2014 State of the Market Survey, nine out of ten executives feel bullish about the next 12 months.  (Click the image below to download the study PDF)

Real Estate Investing With Promissory Notes

Many people are looking to residential real estate is an alternative to more traditional investment.  What many may not know, is that people have been buying the paper, rather than the property, in the form of promissory notes.  

Eddie Speed, of Colonial Funding Group says that most people have never considered buying a note.  Performing and non-performing are two kinds of notes, Speed says more knowledge is required in buying non-performing notes.  One can own a performing note and have it third-party serviced and have it be a lot less labor than owning a rental property.  Speed says that the question is simple - would you rather be the landlord or the bank?  

Eddie Speed

Colonial Funding Group

Source: linkedin.com

To make it work and make it pay, Speed buys loans secured by real estate at a discount, meaning he pays less for the note than what the customer owns.  When buying non-performing notes, you're paying 30-50% of the value of the property.  This, he says, is why people are buying the note instead of the property.  When bidding for a non-performing note, it's a percentage on the value of the house, not what is owed on the house.  Speed believes this is something the average person can invest in successfully.  

If you're buying performing notes and you have enough evidence to believe the customer has been making payments in the past, there's a 98% chance or greater that no legal action would need to be taken in the future.  When working with people with Self-Directed retirement accounts, which is a huge part of Speed's business, he finds they have less trouble and aggravation than with other investment.  

Investing in non-performing notes, where the upside can be much higher, is a detailed business that requires a knowledge of real estate appraisal techniques and strong familiarity with the real estate and finance laws in your state.  You will also need the resources and willingness to take legal action to protect your interests if necessary.  

Eddie Speed, of Colonial Funding Group, spoke with Alternative Investing News providing online alternative investing video news content.  Alternative Investing News is a featured network of Sequence Media Group.  This video was brought to you by Vantage Self-Directed Retirement Plans.

Abundance of Capital & Low Interest Rates Fueling Real Estate Optimism

According to a survey conducted by international law firm DLA Piper, commercial real estate executives are overwhelmingly optimistic on the outlook for their industry through the next 12 months.

DLA Piper's Global Real Estate Practice Co-Chairman, Jay Epstein, says "The abundance of capital and low interest rates are big factors."