Where to Find Overlooked Investment Opportunities
One of the most overlooked opportunities for investment can be found within miles of your home and family and far away from the chaos of Wall Street.
Historically, these opportunities were back-room deals exclusive among close-knit peer groups. This is because the SEC reserved these types of deals for the affluent investor (Accredited Investor).
Until the JOBs ACT of 2012, which loosened the advertising rules of securities offerings, these investments could not be shared publicly.
Nowadays, you will see more of these opportunities being advertised but are being offered by large, national face-less corporations. There is a bright side, however, that there are local and regional opportunities starting to emerge. We’ve found that some of the most lucrative investments are those that are local and regional.
Here are some reasons why we recommend them:
Besides the local economic impact of investing locally, being familiar with a local city or region gives you an advantage to information that outside investors don’t enjoy hearing that can benefit you financially. By investing locally:
- You will positively impact your community.
- You will contribute to the prosperity and economic growth of the community, region, and state.
- You can influence for the better to the makeup of your community.
- You help to keep jobs local. When local enterprises thrive, more jobs are created, keeping money local to boost the local economy and domestic workers.
In addition to the positive economic impact on your community, these are some of the investment advantages of staying local:
- By investing in local assets directly and in passive opportunities like private investment funds, you are in an ideal position to analyze deals. Nothing beats familiarity with both local and regional economies and the communities for assessing the feasibility of investment opportunities.
- By investing locally or regionally also gives you the opportunity to touch and feel an investment. Potential direct investment assets can be inspected in person. With passive investments, you can have the chance to meet directly with fund sponsors. The opportunity to directly examine an investment opportunity allows you to align your investment goals and objectives with those of the opportunity or with the sponsors of a fund.
- By being local and having an intuitive understanding of the market, allows you to assess risk better than if you were investing in an unfamiliar out-of-state market.
- By being local, you are able to keep a pulse on the local economy and businesses that are moving in and out.
- By investing locally, you give yourself an advantage over non-local competitors who don’t have the same intimate local knowledge and relationships that you possess.
- By investing locally, you insulate your investing capital from Wall Street volatility. Wall Street is prone to adverse effects on the markets from a range of economic and geopolitical events, undermining investor confidence.
- By investing locally, you may be able to take advantage of local economic incentives like local tax breaks or revitalization incentives not found elsewhere.
Familiarity allows you to analyze deals through a more knowledgeable lens of experience and will enable you to cut through the fluff when considering passive private investment options.
Staying local doesn’t mean sticking to just your local city or town. If you have established family, friends, and a professional network in a region, these relationships and your familiarity with the territory can allow you to invest with confidence regionally either directly or passively by partnering with a private investment fund.
When investing, don’t be lured by the bright lights of the big cities. The most financially rewarding opportunities can be found right in your backyard.
Michael Foley, president and CEO of Humabilt Capital, oversees the entitlement process, funding, and operations for Humabuilt Capital. Mr. Foley has been a full-time real estate investor since 1995 during which time he has developed hundreds of single-family homes, townhomes, condominiums, and apartments. Mr. Foley started his investment ventures in Long Beach, California, and has expanded to Apex and Durham North Carolina. Mr. Foley is a graduate of the University of California at San Diego.