Updated: Apr 6
It is generally agreed that a balanced portfolio is a sensible strategy for the majority of folks who are planning their finances for retirement. But what does this normally look like?
Typically, most people have some mix of stocks either directly owned or through a mutual fund or EFT, bonds and perhaps some other asset classes.
Real Estate is considered a strong alternative to add to the mix. Why? It often performs as well as the S&P 500 (historically this has been the case as seen in this Fool.com article) but doesn't tend to fluctuate like stocks do. So there is a little more confidence and predicability to it. You can also leverage real estate by borrowing to purchase it. So it's fair to say real estate investments have just as much return potential as stock investments.
But Real Estate can be cash heavy and not very liquid which is an issue for most people. Who wants their money tied up for 10, 20, 30 years? So how do you include Real Estate into your portfolio without being illiquid.
You could purchase real estate directly yourself, as part of a syndication or through a fund/REIT. For most, the last two options are attractive because it requires less cash up front and has some liquidity options.
REITs can also be fantastic instruments to invest into but REIT's distribute 90% of the income they produce. That's great for yield but not so great if you are also looking for upside gain on the value of the real estate (which is what we all want isn't it?).
This is exactly why we created the CalTier PortFolio Fund.
Our goal was to create a fund that had an ongoing income distribution to investors as well as providing some level of realized upside. When you invest into the CalTier Portfolio Fund you purchase units in the fund. As we invest into cash-flowing multi-family assets the fund size increases and we aim to distribute an income to you. However, as the assets under management (AUM) grows so too should the value of the units you own in the fund. This is called the Net Asset Value (NAV).
At the time of writing 100 Units in the Fund is valued at $500. Each quarter we 'test' the fund to see what the NAV is and adjust the unit price accordingly. We encourage you to read the offering circular for more information on this.
The CalTier Portfolio Fund also has a relatively flexible redemption plan (again see page 43 and 44 of the offering circular) in that you can request your investment back at anytime.
We have tried to create 'the best of both worlds' so that there is an income distribution AND upside potential. With any investment, there is risk so please do read our FAQ page and feel free to message us to ask questions.
Do you have a Self Direct IRA?
If you have a self directed IRA you can use that to invest into the CalTier Fund. Many of our investors do and we will be happy to help you with that.
If you are ready to go and want to get started simply click here and start your investment process.