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Wednesday, April 22, 2015

Rich-Uncles Investors Ask the Questions, My Responses


Many of you who have followed me for a long time know I’m the author at Rich-Uncles.com Education which basically means I’m the company’s (Nexregen REIT I) blogger.  I also happen to be their number one fan, so to say, being given the honor of serving as Rich-Uncles’ Brand Ambassador.  My contact information, as well as that of multiple other investors, is shared on the site so that prospective investors can reach us.  



The idea is simple: give would-be investors a chance to get the scoop from someone who’s already in.  I get several email inquiries monthly from people who’ve found the investment and want more information.  Because I happen to be an educator, I know from my time in the classroom that the questions offered up by students are better learning opportunities then the questions posed by the teacher.  So for you today, I have two great emails to share.  Although I’ve already personally replied to these individuals, I will answer them on this platform so you can get a better feel for the R-U investment opportunity.   

Email Inquiry 1
Monday, April 13, 2015:

“Hi Carlos,
I have been hearing Bill Handle rave about this company on the radio and he talks about doing your due diligence with this company. What were some of your concerns before you invested? What were your expectations?  What were your apprehensions?  Where else can you check out about this company?   All the testimonials are about how great the company is.  I need a neutral unbiased opinion. Thanks, (Name of Person).”

My response:

Hi (Name of Person),

Like most investors I first wanted to make sure the people behind it were legit.  I Googled the Founders and finding them to be in great standing was a relief.  I was further convinced seeing Ray Wirta, CBRE Chairman as the main backer.  Ray is too reputable of a person in the RE industry to be involved in any sort of scheme.  So this was one thing off my due diligence checklist so to speak.

My other concern was liquidity.  I didn't like not having control of when I could sell my shares.  I presented this concern to Harold and Howard when we were brainstorming how to get more investors and Harold was keen enough to set aside money for a share redemption program, in the event people suffered an emergency.  So now one can sell their shares back to the company and get their money back the following quarter.  It's not overnight like the stock market, but it's better than nothing.  I invested with money I don't immediately need so this helps a lot too.

Other apprehensions are systemic worries.  Will RE do well ongoing?  Since I don't have voting rights, can I trust the Founders to make the right decisions with acquisitions for ex?  Well...after a year, I can say I'm quite pleased.  Harold has got the eye for finding great deals.  He's done it twice already!  I'm confident he can keep things going.  

If you want a thorough review of the investment, I invite you to go to my blog, www.commoncoremoney.blogspot.com.  The top blog post is, "Investing with Rich-Uncles."  Over 2600 people have read it in one year's time.  Quite popular.  

Feel free to email me again with any further questions.  Thanks!

Email Inquiry 2
Saturday, March 28, 2015:

“Hello Mr. Gomez,

A friend mentioned the Nexregen REIT to me last week and I've been looking into it as a potential investment vehicle. I came across your blog from last spring and was wondering if you wouldn't mind updating me on how the shares have performed over the past year. Have you consistently received your quarterly dividends? Did you reinvest them? If so, do you happen to know what your rate of return was before and after the reinvestment? I'd appreciate any info you're willing to share. It would be tremendously helpful as I look for new ways to invest (mainly tied up in a few blue chip stocks at the moment- slowly moving along conservatively and looking for something a bit more aggressive but still with consistent ROI).

Thanks so much for your time and for all the great info on your blog!”

My Response:

Hi, (Name of Person)

First of all thank you for your kind words about my blog.  I'm glad it has been of service to you.

I went online to the R-U platform and copied my account $ amount info for you (below).  If I recall, I bought $10K worth of shares (1,000) on March 22nd of 2014.  So I only accrued 11 days or so for my first quarter and had a pro-rated yield for Q1.  So, how it works is that at each quarter, investors get 1/4 of 7.5% (annual yield) on whatever $ amount they have invested.  Taking the end of Q1 2015 which ends on the 31st of this month, I will get 0.01875 x 10,597.34 = $198.70 in dividend which I will re-invest (automatically) and buy an additional 19.87 shares.  I will have earned, therefore, $10,796.04 in one year + 11 days.  If I subtract the $ amount I earned for 11 days…I think it was $22 or something, then my true one year gain is $10,774.  7.5% would mean 10,750 but as you know with the reinvesting and compounding happening, you get more $ over the course of time.  This is all to say that the math always works!  And that it is exactly as the Uncles have stated to investors.
Sell Your Home Yourself And Save Thousands!

The dividends are damn near guaranteed with the way Uncle Harold operates.  He's a math whiz and knows exactly when he needs to buy another property to keep them (the divs) coming at the 7.5% annual yield threshold.  There have been two major acquisitions (a Chase bank and recently a Chevron station) since I first invested.  I am one of their original investors.    The timing for this REIT is spot on with commercial RE just starting to climb its curve path, notwithstanding another major Great Recession, of course, in which case, every asset class would falter…but the odds of that happening are slim.  

I hope this helps and thanks for making me go through the math for my own investment 

Carlos Gomez IRA/401K
 Account is up-to-date 
 Nice job you're reinvesting dividends!
Reinvested Dividends: 79.60 
Account Total $10,796.04 
Total Shares 1,079.60

Sometimes people are afraid to ask questions.  For whatever reason, they will not raise their hand to speak feeling perhaps like their question is “dumb” or inconsequential.  When it comes to investing and your money, you can’t be timid.  I just gave you some tips for beginning investors a few days ago.  
I live by tip number 10 and you too should adopt the mindset of not worrying about asking questions, as many as it takes for you to make a decision, yay or nay, on an investment.  Who knows, in asking a question, you may be helping someone else out?  There’s been many times in my investor career when someone asked a question I hadn’t even thought of or considered.  Thank goodness these people spoke up!
Thanks for reading.  Feel free to leave a comment before you leave.  Also don’t forget you will get a 4.6 out of 5 star eBook: Common Core Money: Financial Literacy for educators & Other Professionals absolutely free when you subscribe to this blog.  A $9.99 value at Amazon. 

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