A private placement investment can be a powerful vehicle to create wealth. A private placement is an equity or debt position in a non-registered security. This means it is not a retail financial product. The benefits of that can make the difference for investors who want a real shot at building wealth and for a few different reasons. We will be breaking down private placement investments so that you have an understand of your options outside of Wall Street to create wealth.
What is a private placement?
A private placement is a security that is not registered to be sold by a registered representative or broker dealer. They are often referred to a regulation D investments. You see, there are the investments that every financial firm knows about and pushes to their clients, that I refer to as “retail financial products”. These are things like stocks, bonds, mutual funds, annuities, and various other products that we are all familiar with. The problem with these is they are inflated, expensive, and usually offer very low returns. A private place is usually a private investment opportunity that is offered only to exclusive investors that are introduced directly to the investment or meet certain financial qualifications. These investments typically offer collateral, little to no fees, and can offer far greater returns compared to the retail options. I specialize particularly in real estate based private placements, meaning the investment is backed by actual real estate and pays a monthly income.
How does a private placement investment work?
When an investor is identified and financially qualified to invest in a private placement, the investor will usually sign a letter of intent, stating they would like to be considered as an investor. It is important to note that most private placements do not advertise because of the federal laws regarding advertising private placement and regulation D investments. They can be shared via referral and word of mouth and that is how they are promoted in most cases. Once the investor expresses interest with a letter of intent, the investor will then look at the memorandum or the financials and business plan behind the investment. If the investor is still interested after reviewing the memorandum he can then do more due diligence on the opportunity before investing. At the time an investor is ready to invest, documents like promissory notes, security agreements, collateral assignments, escrow documents, and various other unique documents will be signed. Then and only then will the investor transfer money to the investment. At this point the investment will begin paying cash flow to the investor on a monthly basis. If everything goes well, the investor will make cash flow on a monthly basis for the length of the investment. If the investment defaults and does not pay the investor, then the investor can foreclose and seize ownership of the underlying asset.
How does someone become an investor?
This is tricky. It is different than most cases where the investment are advertised and well known. Typically, the investment, as mentioned earlier will only be shared word of mouth or by referral. The best bet is to have a connection with a broker or finder who regularly scours the marketplace for qualified opportunities and can introduce them to you. This person needs to be investing themselves in the same kinds of investments. This is actually one of the things my company, Wealth DynamX, does for our clients. We have a pool of qualified clients who get exclusive access to the investments we have in our network. When a client is ready to invest money, we give them an array of options and connect them with the investment.
If you are looking to build wealth like the top 1% historically have, it will not happen in a retail financial product. You will need access to better investments, better partnerships, and exclusive opportunities. If you are looking to create wealth and this sounds appealing to you, click here and my team will setup a call with you and provide more information.
*Note: this is not an offering or solicitation of any specific investment, nor is it a recommendation of any particular investment. All investments contain risk and should be individually vetted by an interested party before investing.
Own Your Potential,
Jerry Fetta
Grant Cardone Certified Coach
Jerry Fetta helps his clients build wealth so that they can eradicate poverty in their own lives and own their potential.
He believes scarcity and abundance cannot co-exist and that the way to end poverty is to help you build wealth.
You were not created to spend 40+ hours per week serving the 40-year-to-life sentence trading your precious time for money just to live in mediocrity.
However, the truth is that time and money must be exchanged. It just doesn’t need to be you making the exchange.
Jerry helps his clients create wealth that exchanges time and money on their behalf. The only way to do this is to make more money, keep it, and then multiply it.
He has helped clients double their income, save $100,000 tax-free, and secure 8-12% fixed annual returns on their assets.
To get started, go to www.WealthDynamX.com/contact
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