When considering investment strategies, most people are already familiar with conventional investments, such as stocks and bonds. Lesser-known alternative investments, such as private equity, hedge funds, and real estate can be excellent additions to a conventional portfolio.
One major benefit of having both conventional and alternative investments is diversifying risk. Alternative and conventional investments often react differently to market conditions. Having a mix of both protects the investor and provides better and more consistent returns.
However, navigating alternative investments can be complicated. Real estate, in particular, requires its own expertise and is often highly specialized. Real estate has proven to be one of the best alternative investments when invested in wisely. When considering an investment in a real estate fund, there are several things to keep in mind:
• Make sure that your investment is managed by a financial professional who is subject to a regular third-party audit and regulation.
• Seek out managers who co-invest alongside their clients. A manager with no money at risk may have significant conflicts of interest.
• Look for an advisor who acts with transparency and provides formal disclosure documents outlining specific investment risks.
• Pay attention to how the real estate investment is structured. Many managers will seek to boost investor return by taking on additional risk, often through overreliance on debt.
• Consider the worst-case scenario. A manager with the ability to take over and finish a faltering project can often turn a bad scenario into a good investment.
• Consider the experience and knowledge of the manager. One with intimate knowledge of local laws, players, and market conditions is always at an advantage.
Romano Capital has built its business on these principles which has uniquely positioned it to maximize returns while minimizing risks for its investors. In 2003 Romano Financial was started as a loan brokering business. Today it is known as Romano Capital and does a lot more than it did when it was Romano Financial which is why it is now called Romano Capital.
“We’re not simply a developer,” said Andrew Bielat, vice president of investor relations for Romano. “We’re truly a fiduciary for people who invest in our real estate projects. There are different ways to invest across the different cycles of real estate. There is a time to buy land, to hold that land, to entitle that land and to build on that land.” That is where having local knowledge of the area and needs of the community are critical.
Bielat said another positive with real estate is its increasing demand in the area. “The demand for entry-level housing, a focus of ours, has stayed strong and gotten stronger,” he said. The goal at Romano Capital is simple, get the highest returns while mitigating risk as much as possible and preserving the capital of our investors.