The Buyline, December 2015

December 4, 2015

Thoughts from the desk of Bob Repass…

“Once-in-a-Lifetime” I realize terms like this at times are tossed around frequently and become more of a cliché. What truly constitutes a once-in-a-lifetime moment or opportunity?

Well, recently my wife Angie, my daughter Kristin and I had what I feel was a once-in-a-lifetime experience when we met the 43rd President of the United States, George W. Bush. Now regardless of one’s political affiliation, how awesome would it be to meet a former President? Well let me tell you – Pretty Awesome!

I have been fortunate enough to have heard President Bush speak on several previous occasions and always found him to be humble, witty and surprisingly funny. But never did I think I would ever get the chance to meet and speak with him.

Last month, Colonial Capital Management was a Sponsor and Presenter at the SBRE Investor Summit here in Dallas where President Bush was the Keynote Speaker at the Gala Dinner. As a sponsor, we were privileged to be invited to a private reception after dinner to meet the President which included a photo opportunity!

Now, it was made very clear up-front that there were certain ground rules that had to be adhered to, he would only be available for a certain number of “clicks”, only two people could have their photo taken with him at a time, and keep the line moving.

Well this worked out well for us, especially in Kristin’s mind as she was going to get her picture alone with the President. Let me tell you, President Bush could not have been more accommodating and personable to everyone as they made their way to get their pictures made. He would ask everyone where they were from and how they were doing.

As Angie and I made our way to him he greeted us and seemed excited when we told him we were from right here in Dallas. After the picture we thanked him and told him it was an honor to meet him and that our daughter was next in line. “Go stand right over there” he said pointing to his right. OK, what ground rule did I break? immediately crossed my mind. He turned greeted Kristin, had a brief chat with her and after their picture was taken he turned to us and said “OK Mom and Dad get back in here” and all three of us got our photo taken with Bush 43! The icing on the cake came just the other day when in the mail we received all three photos signed by President Bush – in my mind a once-in-a-lifetime moment for sure.

As we close out 2015, I want to remind all of you to slow down and enjoy the moments. Take a minute and examine your work-life balance. It is so easy to get caught up in the day-to-day frenzies that we overlook some of the most important things in our lives. So at this time of year, reflect on the past 12 months and give thanks for all the blessings and freedoms we are fortunate enough to have. Spend time with your family and friends and thank them for being there to support you each and every day. Personally I want to thank my wife, Angie; my son Robbie, my new daughter-in-law Emma; and my daughter Kristin; without them, none of this would be worth it. I am truly blessed.

I also want to thank all of our clients, students and counterparties for making 2015 a very successful year. I value the relationships that we’ve built with each and every one of you. On behalf of all of us at NoteSchool, Colonial Funding Group and Colonial Capital Management, we hope that you have a happy and safe holiday season, and we look forward to working together in 2016!

Bob Repass
Managing Director

The Trading Corner

Year End Financial Checklist for Investors

By Martha Speed

With the end of 2015 fast approaching here is a brief checklist of things you may want to take care of before year end.

Most companies in the self-directed retirement space are also in agreement that one of the best investments for retirement accounts are passive, cash flow investments such as real estate notes. This is why Eddie and I have spent years building our retirement account with performing notes.

There are several factors that have allowed us to build retirement accounts that are unique advantages for us and to passive investors buying partials.

Flexible Spending

Use it or Lose it. Flexible Spending is for medical expenses but must be used by year end.

Maximize tax advantage 401K, 401K Solo and IRA accounts

Opening by December 31, 2015 counts as 1 year toward the 5 year clock for withdrawals.
If you are over 50 you may qualify to contribute as much as $6,500. to an IRA or $23,000. to a 401K plan based on adjusted gross income.
The 401K Solo and SEP IRA’s allows for the highest contribution levels if you qualify as a small business owner.
Check with one of our preferred Custodians to determine your annual contribution limits and options.

Required Minimum Distribution (RMD)

Don’t forget to complete forms & instruct your custodian to pay Required Minimum Distributions.
RMD for an inherited IRA

If you’re age 70.5
If you turned 70.5 during the year, you are not required to take the RMD until next year. However, if you wait until 2016 to take your 2015 RMD plus the RMD at the end of 2016, will this put you into a higher tax bracket?

Roth Conversion?

If you expect to keep moving into a higher tax bracket think about converting your Traditional IRA to a Roth IRA or open a new account before your pay scale increases.

Coverdell Educational Savings Account

This tax savings account can be passed down generation after generation.
2015 contribution is $2,000.00

HSA Heath Savings Accounts (HAS)

Did you know you can use the money in your HSA to make investments?
If you have a high deductible health plan open a HSA. The 2015 Contribution is $6,550. per household plus $1,000. catch up contribution over 55 for each spouse.
The total contributions plus profit on investments can be distributed at age 65 tax free & penalty free for qualified medical expenses.
You may also make a transfer from a Traditional IRA to your HAS once in a life time.

Are you an accredited Investor?

Looking for a high yield passive investment? Call 888-633-1113today and speak with one of our fund managers about the earning potential in Colonial’s Capital Fund!

Review and Balance your investment portfolio

Have you meet your target investment goals for 2015?
If not, analyze your portfolio to know if you have underperforming assets that might offset gains.
Is your money in a self-directed retirement account not earning any interest?
Maybe you never got around to ever making an investment in 2015?
Don’t let your investment dollars sit idle. Put you’re dollars to work, buy a performing note, invest in a partial with us, get your money working for you creating cash flow before the end of the year!

Charitable donations

Charitable donations can help you lower your tax bill. Make sure you contribute to a qualified organization and get tax receipts.
Most importantly it’s the best time of the year to give of your time, money and talent to those less fortunate than yourself.

Other areas to consider

Is your Will and your beneficiaries up to date?
Do you need to set a holiday budget for this year or a house hold budget for 2015?

Self-Directed Retirement Administrators agree Real Estate Secured Notes are one of your best investments to grow your account!

Happy Holidays to everyone! Wishing you a happy, healthy and prosperous new year!

MarketPulse

NoteExpo 2015 – Recap

By Eddie Speed

450+ attendees enjoyed NoteExpo 2015 held in Dallas, November 6th & 7th. The quality of the content was top-notch as was the opportunity to connect and make new contacts with players from across the industry.

Note Expo Here’s what some of the attendees had to say…

“The panel discussions were the best ever. The questions were thoughtful and informative. They really elicited very useful information.”

“I thought the NoteExpo was excellent. I really liked the breakout sessions added this year. I also really appreciated spending time going over the partials. Very well done and already bought my ticket for next year.”

Note Expo “It was my first NoteExpo. I did not know what to expect, but I enjoyed the entire conference. Learned a lot and met a lot of people. This venue offered tremendous networking opportunities.”

If you were unable to join us this year, please go ahead and “save-the-date” for NoteExpo 2016 taking place November 4-5, 2016 in Fort Worth, Texas or register today.

Employee Spotlight

Our Staff

The Staff…

There are many people behind the scenes that drive the engine to make our companies successful. Each month throughout the year, we feature one of them in our Top Ten section. However as 2015 winds down, I would like to extend a very special Thank You to each and every member of our team. We are very fortunate to have a great team of employees. It is through their hard work and dedication that we have been able to have the kind of success we enjoyed this year. I am confident we have the very best people in our industry and I would like to recognize all of them this month.

Executive Team: Eddie Speed, Martha Speed, Bob Repass, Charles Mangan, Susan DeLaGarza and Ryan Parson

Executive Support Team: Tiana Banes, Brian Kanzaki and Jeanna Clifford

Trade Desk Team: Angie Repass, Matthew Edwards, Tim Siebelink, Michelle Winberry and Mark Jamlech Santos

Customer Fulfillment Team: Riley Goff, Jesse DeLaGarza and James DeLaGarza

Sales and Business Development Team: Duane Gibbs, Ben Haught, Kevin Moore and Rachel Suttles

Curriculum and Mentoring Team: Kevin Shortle, Joe Varnadore and Czarina Harris

Capital Markets Update

Cause Investing

by Ryan Parson

I hear more and more people talking these days about socially responsible investing – the notion that you can advance the greater good of society and the earth and still make a profit.

More than any previous generation, the so-called Millennials are having more influence with their inherited wealth. Their socially conscious investing efforts run a wide gamut from using dollars to clean up waterways, making drinking water more accessible in third world countries, planting trees, saving parks and creating job opportunities in emerging and re-emerging areas… the list goes on and on.

The premise behind socially responsible investing is to give prominence to social ideology first, then profit second. This is becoming a topic of more significant conversation with family offices that are making their portfolios more socially responsible at the bequest of their children. It’s also serving as a focal point in the transitioning of the decision makers for family wealth as the overall investment philosophy evolves.

While this seems counterintuitive to the traditional investors’ mentality in which profit takes precedence over most everything else in a capitalistic society, as time has gone on, there have been more ways to marry social responsibility and profit in a well-balanced portfolio.

Are Alternative Investments Socially Responsible?

Perhaps there’s yet another viewpoint to consider in light of this discussion about the interchange between social responsibility and the desire for profit. As alternative investments continue to be sought after by discerning investors in order to achieve targeted risk-adjusted returns, socially responsible desires are becoming more desirable within the alternative investment space, too.

One such asset class within the alternative investment space is distressed and discounted mortgages. When we purchase a pool of non-performing loans, there are several ways to create profit from such a deal. These include instances when the borrower deeds property back to us, the unfortunate time when foreclosure becomes necessary or getting a modification done with the homeowner. Within that modification process lays an example of socially responsible investing. When we can work with a homeowner, in almost every circumstance, it works well for both parties.

What is better from a social responsibility standpoint than helping someone stay in their home and giving them a payment plan that is one of the most affordable they’ve ever had? It feels good for them knowing that their mortgage is no longer under attack… and they can carry on their lives. They can begin to focus on their families and communities without the pressure of worrying about if they will lose their home or not.

Looking at the ability to work with a modification and having the existing borrower paying again is a definite win-win for both the homeowner and the investor. the most profitable exit strategy when owning a non-performing loan. That is the easiest outcome and the least painful process for the borrower to go through. This process saves a potentially foreclosed property in the neighborhood and in turn enables the homeowner to get back on the path to being productive with their time and talents. There are also many indirect benefits for people to be homeowners in the community and to be financially stable.

In this respect, investing in distressed mortgages mirrors very perfectly the concept of social responsibility. Sure, it’s not necessarily cleaning up waterways or planting trees, but it may lead to one more family getting to stay in their home and enjoying their lives. There’s an undeniable humanitarian component to such a modification that parallels the key elements of social responsibility.

As you look at your portfolio, how much do you intend to have in socially responsible investments? How do you regard the assets you have? Can you look at them differently and find a way to combine profit and social responsibility?

Quote of the Month

“Never forget that intelligence rules the world and ignorance carries the burden. Therefore, remove yourself as far as possible from ignorance and seek as far as possible to be intelligent.”
– Marcus Garvey