[00:00:00] Speaker A: You're listening to the Preferred Way, a retirement podcast brought to you by Preferred Trust Company, the preferred custodian for all alternative investments.
[00:00:09] Speaker B: Hi, and welcome to another edition of the Preferred Way. I'm Chris Tremblay, director of operations for Preferred Trust Company, and today we're going to be talking with Mason Weiler. He is from Connect Invest, director of operations over there. He's going to be telling us a little bit about Connect Invest and the investments that they have to offer. So welcome to the podcast.
[00:00:28] Speaker C: Thank you for having me. Very excited to be here.
[00:00:31] Speaker B: Oh, and don't forget, I'm always told you need to like and then subscribe and I'll remind you again in a little while. So make sure you do that. All right, so tell us a little bit about Connect Invest and the investment opportunities that they offer.
[00:00:43] Speaker C: Absolutely. So a little bit about Connect Invest. It was established in 2015 and the founder wanted to create a online investment platform. Essentially, he's been in the real estate investing space for about 30 years, and what he wanted to do was take that and streamline it to make it more fintech with how it traditionally was. So that's what he went off and started doing. But the platform wasn't launched until about 2019, 2020, and at that time it was only available for accredited investors and they could only participate directly in funding individual loans. So they saw a good deal of pickup for people wanting to get involved and invested in this product. However, at the time, due to the qualifications to get involved, you had to be an accredited investor. So that was one thing that kind of stopped people from moving forward because not everyone's fortunate enough to be an accredited investor. And so what he did was in 2021, went out and seeked a different offering to allow people to invest into real estate through what's called a debt note offering. And so that was qualified by the SEC in 2021. So what we were able to accomplish with that offering was allow individuals the ability to invest into real estate and alternative investment through a debt note structure, as well as make it more accessible because of how the minimum to Invest is only $500. And so Connect Invest really just an online investment platform for individuals to hop on, create an account and start investing to earn anywhere from 7 and a half to 9% with the asset being actual collateralized real estate behind it. So that's a little overview of Connect Invest and how it was started and how we've evolved from traditionally just being available to accredited to now being available to the everyday person wanting to get involved in real estate investing.
[00:02:31] Speaker B: Awesome. So what is unique about the Connect Invest platform and the products and what's being offered?
[00:02:38] Speaker C: So it's really easy to basically manage your account and set everything up. So, you know, as times continue to evolve, back in the day, it was a little more strenuous, a little more paperwork needing to be filled out, whatnot. And so with our platform, you can create the account in a span of minutes and invest using cash, retirement funds or even an llc. The note offering itself, we actually broke it up into three different series.
[00:03:03] Speaker B: Oh great.
[00:03:03] Speaker C: So we have a six month note that pays seven and a half percent annualized rate of return. We have a 12 month note that pays eight percent annualized rate and a 24 month note that pays nine percent annualized rate. So we've broken it down to have people to provide basically defined exit dates for people as well as the interest on the investment is paid every month and then greater diversification. So one of the things with the notes offering is many people probably don't have enough funds to go and invest into several different real estate loans if they would. And so what this allows them to do is invest into one singular note. And their funds are essentially going to be diversified across our entire portfolio, so minimizes the risk for the investor with how we structured the notes offering.
[00:03:48] Speaker B: And so what's offered in the portfolios, what are they going to see when they go to select the investment?
[00:03:54] Speaker C: So it's very, on the surface you're just going to see three different series. So you're going to see a 6 month, 12 month, 24 on the back end is where the real exciting stuff is, I would call it. So in the portfolio it's anything from commercial loans to residential. Everything we invest into is in first position at about 65 to 75% loan to cost. And it's going to be diversified across different project types. So there's acquisition phase, there's development phase and there's construction phase. So that's essentially kind of what the portfolio ties to is all the loans that we've participate in funding across. It's primarily on the west coast, but it's across different borrowers, geographical locations. So we're just really drilling into it to minimize risk and provide proper diversification for people wanting to get invested in real estate, but not maybe want to deal with the hassle or you know, direct ownership whatnot. So that's really some benefits for it.
[00:04:48] Speaker B: Yeah, I think people always think when they think of investing in real estate, they might think of rental properties. Or fix and flip and all that work that comes behind it. And don't realize that there are ways to invest in real estate that don't take as much work. You can let somebody else do the work and still reap the benefits of the investment.
[00:05:04] Speaker C: Exactly. And then we've had a lot of people happy about that because you're able to get, you know, seven and a half to 9% and just sit back and not have to do a whole lot. Get your interest paid every month. You'll get notifications. So it's very easy if you're looking for that return. And exactly like you said, you don't want to deal with the direct ownership. If you have a rental, you don't want to deal with a tenant, you don't want to deal with problems. It's sometimes a bigger headache than it is that you see from the returns that you're actually getting.
[00:05:26] Speaker B: Absolutely. So if someone's interested, can they invest in more than one? Can they do a 6 month and a 12 month? Can they invest across the board?
[00:05:35] Speaker C: Yeah, actually. So whenever you sign up, you can go and invest into several different notes. So some investors, they do like the ladder investment strategy. So every month they might pick up a new six month note. So on the seventh month it starts maturing. They're starting to see that come back on a monthly basis. So yeah, whenever you want to move forward and purchase a note, it's not once you're in. You gotta wait till it matures to maybe purchase another one. It's fully open. So once you know your accounts established, you're able to from there, invest as.
[00:06:03] Speaker B: Many times as you want.
[00:06:04] Speaker C: Yeah, invest as many times you want. But again, you still want to be diversified. So don't put 100% of your portfolio into a note. Right, right. It's only meant to be like a portion of your portfolio to make sure you're still diversified.
[00:06:15] Speaker B: And that's really important. I think specifically when we're talking about investors that are using a self directed ira, we always like to tell them, don't put all of your eggs in one basket. Keep it diversified. So this is a great way to do that.
[00:06:26] Speaker C: Exactly. And even on the company standpoint, Right, like we don't take all the funds and invest it into one loan itself.
[00:06:32] Speaker B: Right.
[00:06:32] Speaker C: We make sure we're diversified across several different borrowers and areas as well. Because we don't want to have all of our eggs in one basket.
[00:06:38] Speaker B: Exactly, exactly. Okay, Risk mitigation. Talk to me about risk management and how you all handle that.
[00:06:44] Speaker C: So the loans that we invest into, it first goes through a series of underwriting with our loan originator and servicer. So it already goes through a series of evaluation before it's even opened to us or presented to us as a company to invest into.
Then when we get presented loans, we make sure that we're not too saturated with one borrower or one area itself. So we make sure we're diversified across that in several things that we have in tie. So and with how it's structured too is it's across different loans, like I mentioned of, you know, commercial, residential. And we just drill it down as much as possible to minimize the risk for the company. And that's one way that we essentially mitigate risk for us as the investors or us as a company and the investors that we have at Connectivest.
[00:07:30] Speaker B: So talk a little bit about. I know obviously cash is easy, it's fast, it's easy. But obviously this platform is made to be even easier for the client. There's no paperwork going on, all that type of stuff. Like you said, as times evolve, things evolve, technology gets better and better. But what about someone who wants to invest with a self directed ira? Little bit different process, right?
[00:07:53] Speaker C: Yeah. So we are still developing that process to make it more streamlined. However, the partnership that we have with Preferred Trust has actually made it so much easier than what I've seen with our relationships with our custodians.
[00:08:06] Speaker B: Yay. Due to the fact.
[00:08:08] Speaker C: Yes, love it. Because if you do want to use a retirement account with us, you still need to come to Connect Invest and start the account process. That way we still have to do the identity verification, go through our compliance or our compliances and then from there, from a retirement standpoint, due to the fact that you guys actually host or have the paperwork for the subscription. No purchase agreement. When someone's ready to invest due to the fact that you guys have that, you're able to issue them with the doi, have them sign it and then make, you know, issue the funds to us and they'll be invested. So it's actually I haven't had that relationship with the previous custodian. So that whole thing right there just makes it 10 times easier.
[00:08:44] Speaker B: We aim to please. I tell you, we do lots of years of working through kind of the headaches and trying to figure out the best way to do it, but we do try and make it as streamlined as possible. I think that for investors is super important to realize is that not only do they have to still open an account with Connect Invest, they've got to open that IRA with Preferred and then we help them work through the process to be able to fund their investment with Connect Invest. But there's always somebody on both ends, both companies that are there to kind of help you and walk you through that. So tell me a little bit about what's on the horizon for Connect Invest in the future. New products, partnerships, things like that.
[00:09:20] Speaker C: So nothing too crazy from a developer development standpoint. What we have going on is quarter four we are releasing our app. We've been working on hard for Nice. I'm hoping that's going to be out in the near future. However, with development, you know there's some roadblocks you run into with testing but very excited about that. The app, you're going to be able to do everything that you can on our website through the app. So whether that's opening an account, checking your note investments to see what you've earned in interest or even seeing, you know, the short note portfolio or anything to that you're able to do through the app. So excited for that. Another development that we have coming out is what we call next day activation. Currently through our notes program they activate every week. So once you're invested you might have some downtime a few days before you start accruing interest. Other platforms, they might need a wait till a fund fills up or something funds with us this is going to allow you once you invest today when the funds post start accruing interest the next day. So it's really going to be like start earning interest in 30 days. So super excited. And then the last thing that we have coming out is the interest bearing wallets. Unfortunately personally it's not going to be available for retirement accounts just because the funds do have to get sent back to the custodian when they're earned. Well if they have a cash account or LLC account, we are opening up interest bearing wallets. It's going to pay more than what you're seeing in your traditional savings account. It's not going to be paying as much as you might get at a high yield savings account. It's going to kind of fall in the middle.
[00:10:45] Speaker B: Okay.
[00:10:45] Speaker C: But obviously as you know the rates start to adjust. High yield savings accounts are going to pay as what they were in the last year, 5% or whatnot. So it's going to be start to be more competitive in that space as.
[00:10:56] Speaker B: Well for our investors which and you just never know. I mean things evolve in the retirement world as well. So you never know. We could end up falling under that envelope at some point as well. So talk a little bit about if someone is interested, what is the first thing that they should do if they're interested in investing?
[00:11:12] Speaker C: Absolutely. So first and foremost, you'd want to go to connectinvest.com and begin the account process. So you're initially starting your account portal, so you get a login and your credentials, and then from there you select if you want to do, you know, retirement account, cash, or even set up a business account. And then from there, you'll follow the prompts on the screen. Retirement. A little more back and forth just with the custodian to make sure that, you know, it's set up properly, the documentation is correct. And then from there, once they're invested, they sit back, earn interest. There's not a whole lot to do, which is what I like. It's simple, it's easy. Sometimes it drives people nuts because they think there's a lot more to it.
[00:11:47] Speaker B: Right.
[00:11:47] Speaker C: But at the end of the day, the whole point of Connect Invest was to simplify the real estate investing process and to provide a great return. So very simple. Once you start getting payments, you get email notifications notifying you of, you know, you received interest or you received a principal payoff. And then when the funds are withdrawn as well, especially when we send back to custodians.
[00:12:07] Speaker B: So from there, can they go on, log in and see the interest payments posted to their online account? Do they have the way to do that?
[00:12:13] Speaker C: Yeah. So in the dashboard, you'll see your active investments. If you have any completed, you'll see that as well.
[00:12:18] Speaker B: Okay.
[00:12:18] Speaker C: You'll see the interest earned per note, the date, the notes going to pay off, because they are fixed dates.
[00:12:23] Speaker B: Okay.
[00:12:24] Speaker C: And then you also see a transaction log. So when the funds are posted to the account, when the interest was paid to the account, sent back to the custodian for retirement accounts. That's all accessible through the dashboard.
[00:12:34] Speaker B: Nice. And then of course, we talk about all online and, you know, very easy access. But if somebody has a question about their account or they want to talk to a representative, is there someone that they can call and talk to at Connect Invest? I think a lot of times everything's online and people freak out a little bit and they want to know there's like a human that they can.
[00:12:51] Speaker C: Yeah.
[00:12:51] Speaker B: Can correspond with.
[00:12:52] Speaker C: Yeah, absolutely. So we have customer service reps. So anytime people have questions, they call in. If they're busy or unable to get to you, they guarantee they'll get to you in the next few minutes. Always they can schedule consultations and online meetings via Zoom as well. So if they have questions, they can call in and we're actually going to answer and be there for you and help you out. So perfect. Very happy about that.
[00:13:14] Speaker B: Anything else you want to tell us about Connect Invest? Anything important that the investor should know?
[00:13:19] Speaker C: If you're looking for an alternative investment or you're still new to what an alternative investment is, I encourage you to do some due diligence and research just because it might be a product that you might not be familiar with, but it could provide a potential greater return than you might see with your traditional investments. So especially with Connect invest, minimum of 500, also minimum duration of six months, you're able to kind of dip your toes in the water, test it out, see if you like it or not, and if you don't, you get your principal back in six months. Not a lot of people are familiar. They can use self directed retirement accounts to invest into our product itself. So just really getting the name out there, introducing it to a new audience just to explain the benefits of what it could do for their retirement account to help supplement some income. To get in touch with Connect Invest, please see the information below and reach out to us and we'll be happy to help you. Definitely do the research. Take your time and it might be something that could be very beneficial to you in the future. And if you do have any questions, please reach out to us
[email protected], our number is also on there as well. If you have questions, call in. We'll be happy to help you out.
[00:14:21] Speaker B: Great. And Mason makes a very good point. Obviously when you have a self directed IRA and you're using those retirement funds to invest in alternatives, you do have to do your due diligence. You do need to look into the companies that you're looking to invest in. Make sure you check them out. Ask all of the questions. It's a great way to get started. As Mason mentioned, the barrier to entry is $500, which is a lot less than a lot of alternative investments today. So it's a great way to dip your toes in the water and get a feel for it. So thanks Mason. We're glad to have you today. We appreciate you guys watching. Don't forget to like and subscribe and we will talk to you and see you on another episode of the Preferred Way.
[00:14:59] Speaker A: Thanks for joining us for another episode where retirement savers meet alternative investments. Can't wait for the next episode. To learn more, visit our website at Preferred TrustCompany Combat.
