Episode 63: Understanding Debt and Credit Funds with Michael Episcope

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Michael Episcope co-founded Origin Investments in 2007. Michael is co-CEO, co-chairs the investment committee and oversees investor relations and capital raising. Prior to Origin, Michael had a prolific trading career and twice was named one of the top 100 traders in the world by Trader Monthly Magazine.

Connect with Michael Episcope

https://origininvestments.com/

In this episode of Tech Equity and Money Talk, Michael Episcope from Origin Investments discusses the rise of credit and debt funds in the private equity market.

He explains that these funds invest in a part of the capital structure that's more protected than equity, aiming to provide stable income through yield.

Listeners are advised to be cautious of inexperienced managers rushing to invest due to the pressure of closed-end funds.

Credit funds provide stable income for investors by investing in a part of the capital structure that is more protected than equity. These funds typically invest in senior debt or leverage senior loans in some way, with the intention of generating stable income through yield rather than appreciation in the asset itself.

This makes credit funds a valuable alternative investment option for investors looking for consistent returns.

In this episode, we talk about:

• Track Record and Experience: Evaluating the track record and experience of fund managers is paramount. Investors should seek out managers with a proven track record and a proficient team for deal origination. Understanding the source of deals and the investment strategy of fund managers is essential in assessing their credibility.
• Strategy and Competitive Advantage: Investors must ensure that the fund's strategy aligns with their investment objectives. It is crucial to grasp the competitive advantage of fund managers and how they intend to generate returns. Any deviation from the strategy or lack of alignment with the fund's competitive advantage could pose risks to investors.
• Leverage and Risk Management: Understanding the leverage within the fund's structure is crucial. Investors should inquire about the use of leverage and whether the fund is taking on excessive risk to chase higher returns. Excessive leverage and cross-collateralization can magnify risks during market downturns.
• Fund Size and Diversification: Evaluating the fund size and diversification is vital. A smaller fund size may lead to higher expenses relative to assets, impacting overall returns. Additionally, a lack of diversification within the fund could increase concentration risk and hinder the fund's ability to withstand market fluctuations.
• Expert Advice and Impartial Opinions: Seeking advice from industry experts, financial advisors, or consultants can offer valuable insights during the due diligence process. Engaging with professionals can help investors make well-informed decisions and steer clear of potential pitfalls.
• Patience and Education: Patience and education are fundamental components of effective due diligence. Investors should take the time to study the market, comprehend investment opportunities, and be proactive in decision-making. Rushing into investments due to fear of missing out (FOMO) can lead to suboptimal outcomes.

Episode Timeline:

• [00:02:33] Credit funds in investment portfolios.
• [00:04:27] Loan-On-Loan Execution
• [00:09:36] Understanding risk in credit funds.
• [00:13:35] Understanding cross-collateralization in investments.
• [00:16:14] Cross collateralization in investments.
• [00:19:38] Reinvesting in Debt Funds
• [00:24:31] Balancing portfolio for tax benefits.
• [00:26:56] Diversification in real estate investing.
• [00:30:16] Debt fund risks in investments.
• [00:34:37] Be cautious with new syndication teams.
• [00:38:51] Common sense in investing.
• [00:40:45] Emotional Decisions in Investing.
• [00:43:09] Wealth building through education.

Episode 62: Mobile Home Park Investments with Christopher Nelson

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In this episode of "Tech Equity and Money Talk," host Christopher Nelson discusses the importance of exploring new asset classes to diversify your portfolio and increase cash flow.

He shares his personal experience of shifting focus to mobile home parks as a lucrative investment opportunity, highlighting the stable income they can provide.

Tune in to learn how incorporating mobile home parks can enhance your investment strategy and generate consistent cash flow!

Embracing change for personal growth is a fundamental aspect of living a fulfilling and successful life. In a world that is constantly evolving and presenting new challenges, it is essential to be open to change in order to adapt and grow as individuals.

In this episode, the host discussed the importance of embracing change and how it can lead to personal growth and development.

One of the key points made in the podcast was that change is inevitable and resisting it only hinders personal growth. By embracing change, we allow ourselves to learn new things, develop new skills, and adapt to new situations.

This can lead to increased self-confidence, resilience, and a greater sense of accomplishment. The host emphasized that by stepping out of our comfort zones and embracing change, we can discover new opportunities and experiences that we may have never encountered otherwise.

In this episode, we talk about:

• Diversification is Key: As an investor, it's crucial to explore new asset classes to diversify your portfolio. Staying open to new opportunities can lead to discovering hidden gems like mobile home parks that offer substantial cash flow and stability.
• Recession-Resistant Investments: Mobile home parks have proven to be recession-resistant assets. Their affordability and high demand make them a reliable investment option even during economic downturns. Understanding the dynamics of this asset class can help you navigate uncertain times with confidence.
• Partnering with Experienced Operators: When considering investments in mobile home parks, partnering with experienced operators is essential. Look for operators with a proven track record in managing these properties and a clear strategy for maximizing returns while maintaining operational efficiency.

Episode Timeline:

• 00:00:00 - Introduction and Importance of Diversifying Asset Classes
• 00:00:43 - Introduction to Mobile Home Parks
• 00:01:14 - Why Mobile Home Parks?
• 00:02:07 - Exploring Mobile Home Parks: Initial Questions
• 00:03:32 - Understanding Mobile Home Parks: Definitions and Terms
• 00:05:10 - Park-Owned Homes vs. Tenant-Owned Homes
• 00:07:08 - Advantages of Mobile Home Parks
• 00:09:07 - Depreciation and Operating Expenses
• 00:10:10 - Historical Performance and Cash Flow
• 00:11:05 - Recession Resistance of Mobile Home Parks
• 00:12:09 - Supply and Demand Dynamics
• 00:14:06 - Investment Strategies: Buying vs. Partnering
• 00:16:03 - Considerations for Investing in Mobile Home Parks
• 00:17:07 - Vetting Operators and Business Plans
• 00:20:16 - Analyzing Investments: Operations First, Finances Second
• 00:22:03 - Experience and Risk Management
• 00:22:45 - Conclusion: Importance of Exploring New Asset Classes
• 00:23:48 - Final Thoughts and Contact Information

Episode 61: Multifamily Market Trends 2024 with Michael Episcope

Ready to explore the latest in tech careers and financial insights? Click here now for an eye-opening journey at https://www.techcareersandmoneynews.com/!

Michael Episcope co-founded Origin Investments in 2007. Michael is co-CEO, co-chairs the investment committee and oversees investor relations and capital raising. Prior to Origin, Michael had a prolific trading career and twice was named one of the top 100 traders in the world by Trader Monthly Magazine.

Michael earned his undergraduate and master’s degrees from DePaul University. He has more than 30 years of investment and risk management experience.

Connect with Michael Episcope

https://origininvestments.com/

https://www.linkedin.com/in/michaelepiscope/

In this episode of Tech Equity and Money Talk, host Christopher Nelson is joined by Michael Episcope, the co-founder and co-CEO of Origin Investments.

This episode provided a deep dive into the multifamily real estate market, offering valuable insights for both seasoned and novice investors.

Michael's experience and strategic approach to real estate investment highlight the importance of risk management, due diligence, and the ability to adapt to changing market conditions.

Tune in to learn about the criteria that led Michael to choose real estate, particularly multifamily, as a vehicle for growing and safeguarding wealth!

In this episode, we talk about:

• Transition to Real Estate:
• Michael and his partner David transitioned from trading to real estate to protect and grow their wealth.
• They were motivated by the stability and simplicity of real estate, influenced by Michael's early exposure through his grandfather.
• Investment Strategy:
• Origin Investments focuses on multifamily real estate, particularly in high-growth markets.
• They employ a barbell strategy, balancing preferred equity and ground-up development to manage risk and protect capital.
• Market Insights:
• Michael shared insights on the current state of the multifamily market, noting oversupply in Sunbelt markets like Austin.
• He emphasized the importance of buying below replacement costs and the potential opportunities in distressed assets.
• Risk Management:
• A significant part of their strategy involves understanding and mitigating risks, especially in volatile markets.
• Michael highlighted the importance of having a strong balance sheet and being cautious with leverage.
• Advice for Investors:
• Michael advised investors to look beyond headlines and perform their own due diligence.
• He stressed the importance of trusting and verifying information from sponsors and being cautious of diversification across too many managers.
• Current Opportunities:
• The current market presents opportunities for contrarian investors who can see beyond short-term distress.
• Michael discussed the importance of understanding the motivations behind investment managers' decisions and being wary of strategy drift.

Episode Timeline:

• [00:01:37] Choosing real estate for wealth.
• [00:03:52] Real estate wealth and risk.
• [00:08:10] Distressed capital structures.
• [00:10:57] Multifamily market oversupply and demand.
• [00:13:25] Investing in lifestyle cities.
• [00:17:06] Real estate investment during recession.
• [00:20:44] Looking beyond the headlines.
• [00:24:39] Throwing money into a hole.
• [00:27:23] Due diligence and verification.
• [00:29:38] Diversification in Real Estate Investing.
• [00:33:06] Strategy drift in investments.
• [00:36:15] Managing diverse product mix.