Research regularly suggests that large numbers of investors are interested in the idea that their money could be put to use so that it has a positive impact on society and the world, as well as earning them a financial return. Barclays Bank research suggests 54 per cent of investors in the UK feel this way, while a separate Morgan Stanley study puts the figure at 71 per cent; amongst the millennial generation meanwhile, the latter research put interest levels at 84 per cent.

So what stops people putting their money where their mouths are? Just 9 per cent of UK investors have actually made social impact investments according to Barclays. In which case, a shortage of capital may be holding back commercially viable small and medium-sized enterprises that would otherwise be able to make a positive contribution to society.

In truth, there appear to be two problems. One is that investors believe impact investment necessitates the sacrifice of at least some financial return – that they’ll earn less from investments that are designed to do good. Second, impact investment is seen as a standalone asset class – rather than investors looking for equity or fixed-income assets with an impact context, they assume social impact has to be separately accessed elsewhere.

However, new research just published by the investment analysts at All Street provides yet more evidence that both those assumptions are incorrect.

For one thing, the research focuses on the member firms of the Social Stock Exchange, all of which offer publicly traded securities or have plans to issue equity or debt securities on a recognised investment exchange – they don’t represent an unfamiliar asset class in other words.

All Street has also looked at the returns generated by impact investments to date; one group of venture capital funds, for example, generated an internal rate of return of 9.5 per cent over the period studied, comfortably outstripping the broader venture capital sector. Meanwhile, funds with a social mission generated investment exits with an average internal rate of return of 33.5 per cent.

The data comes as no surprise to pioneers of social impact investment such as Martin Leuw, the founder of Growth For Good, an accelerator focused on technology businesses with a social dimension. “I have always maintained that I'm a relentless capitalist and not a tree hugger,” Leuw says. “This research is further evidence that as long as you are authentic, you can do well by doing good - I hope it will encourage more businesses to be a genuine force for good and lock in their mission to strategy.”

The data should encourage more investors to get involved too, for despite the relatively slow take-up so far, impact investment is now gathering pace. Research from Standard Life predicts the total impact investment sector will be worth $1 trillion by 2020, against $60bn today. The high-profile investments made by the likes of Mark Zuckeberg’s charitable foundation are also raising awareness of the possibilities.

In the end, however, it's the story of individual businesses making an impact everyday that provide the most inspiring narratives. Take the story of Roast Restaurant in London's Borough Market, a successful food and drink venture combining commerciality with social value.

"I’ve got to where I am against the odds, having turned around a troubled teenage upbringing in south London where I got into all sorts of trouble; whilst I made that change with the support of people around me," says Iqbal Wahhab, the entrepreneur behind the business, who also launched the award-winning Cinammon Club. "At Roast we’ve offered work experience to inmates at The Clink in Brixton Prison, some of whom have come to work for us on release."

Wahhab says the social impact element of his business has enhanced its returns rather than holding them back, encouraging custom when people find out about it. "We got loads of e-mails and social media messages saying roughly the same thing – they didn’t know Roast employed ex-offenders but now that they did, they would start coming," he adds. "That was a game-changing moment for us because it showed this kind of activity to be core commercial activity."

Link to Forbes

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How Does Real Estate Investing Work?

Real estate investing works best with a strategy, A strategy we can help create or that you can best create for yourself or your investment group.  In determining how you would like for real estate investing to work for you, it is important to first determine the results that you desire from real estate investing.  Are you looking to build wealth, transferable wealth or to create quick cash or both?  Depending upon your desired results as an individual or group of investors, you can choose a short term strategy, a long term strategy or a combination of the two.

How does SIPPC real estate investing work to make quick cash?

Quick cash can be created with a short term real estate investing strategy, which includes quick turning or flipping property.  Quick turning property (buying and selling right away) can provide big and quick cash if we buy right.  Typically, the property is put under contract at a low price and then marketed at a higher price to include a profit. The property may be sold with or without improvements depending upon the agreed strategy with the investing individual or group.  Quick turn deals can easily generate from $2K to $30K plus depending upon the deal and whether it is a wholesale or retail quick turn.

Wholesale Quick Turn
Wholesale quick turns involve finding a deal below market value and quickly selling the deal at a wholesale price.  By selling wholesale (below retail), we are giving our buyers (Can be internal), typically another investor, the opportunity to make a profit.  If we negotiate the right deal upfront and turn the deal quickly, we can make good money this way. 

Wholesaling is often a method of no, or little, money down deals. This is a way that real estate investors get around the need for financial backing for flipping houses.  Let’s say that we find a motivated seller, who is willing to sell us their house at $100K.   We put the property under contract with the seller for $100K and then find another buyer (Investor group) who wants the deal and is willing to pay $110K.  We would then assign our contract with the seller to our buyer for a fee of $10K, but since this is internal, we would only transfer asset for 10K.  Our buyer actually closes and purchases the property from the seller; and at closing we are paid or transfer a $10K assignment fee, less our fee to investor account.  This is an option or another method used to wholesale.  We can put an option on a property and then sell our option to another investor group or individual for a profit.   In fact, with assignments and options, investor groups never even have to purchase the property to make money.  

Retail Quick Turn
Retail quick turns involve finding a property well below market value and getting it market ready for retail sale.  With retail quick turns, our target buyer is a home owner rather than an investor. We may purchase a property that needs a little work, a lot of work, or possibly needs no work at all because we purchase from a motivated seller at a discount.  Once the property is ready, We market and sell it at a retail price. Always look for our property going to the market on Liquidation tab. 

How does real estate investing work to build wealth?

Wealth is created through longer term real estate investing strategies, which involves buying and holding property.  In this scenario, the investor group or groups buys a property and then rents it to a tenant or leases it to a tenant with the option to buy.

Renting

Renting involves finding a property, getting it in rent ready condition and marketing it for rent. The rental real estate investing strategy offers a number of profit opportunities.  Cash flow is created when the monthly rental income exceeds the mortgage and other expenses.  Long term wealth is created through appreciation of the property, the tenants paying down the mortgage, and tax advantages. It also serves as a property for internal rent for all other social services that we offer.

Imagine us having 10 houses paid in full and rented for $1,000 a month for a monthly cash flow of $10,000.  If the houses were only worth $100K each, we would have $1 million in assets plus a $10K per month cash flow before expenses.  This financial position can be fairly easily accomplished in each investor group's timeframe. Note the Asset per investor group with SIPPC is independent of SIPPC assets.  Some investor group buy one or two houses per year and others buy a number of houses right away.

Lease Option

Lease options are created by offering a property for lease (usually for twelve months or more) with the option to buy.    There are a number of profit centers with lease options to include income from the upfront option fee, monthly cash flow from the lease, profit from the sale when the option is exercised and tax advantages.

In conclusion, the answer to the question, “How does SIPPC real estate investing work?” really depends on how each real estate investing group wants it to work for them.  Whether your goal is to build wealth, leave the 9-5, an early retirement,  financial freedom, or quick cash, you can obtain it through SIPPC real estate investing solutions. There are numerous benefits to investing in real estate individually or as a group such as buying at a discount and creating instant equity, equity created through tenants paying down a mortgage, appreciation, cash flow, leverage and tax benefits. Determine your strategy –long term, short term or a combination of the two and make real estate investing work for you by leveraging our solutions.