Markets are never truly predictable, and today’s uncertainties make that even more apparent. As a result, investors seeking secure, diversified opportunities will frequently check out the benefits of debt funds and private mortgage REITs.
There’s much to offer with debt funds—stability, consistent returns, and real estate-backed security. Private mortgage REITs, particularly, are stellar examples of these funds. Together, they make an excellent choice for portfolio diversification.
Unlike the volatility of equity markets or the low yields of traditional bonds, private mortgage REITs and debt funds provide a balanced alternative that delivers reliable income with less exposure to market fluctuations.
But what are the benefits of investing in debt funds and mortgage REITs? How can they offer investors secure, real estate-backed diversification and steady returns?
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What are debt funds and mortgage REITs?
Debt funds are investment pools that use capital from multiple investors to invest primarily in fixed-income securities.
These funds aim to generate consistent income by lending money to borrowers or purchasing debt instruments like:
- Bonds
- Loans
- Mortgage-backed securities (MBS)
Debt funds vary in risk and return profiles, but their primary appeal lies in their predictable income and lower volatility than equity investments.
Mortgage REITs—Specialized debt funds
Mortgage Real Estate Investment Trusts (REITs) specializes in financing or purchasing real estate-related debt, such as mortgages or mortgage-backed securities.
Unlike equity REITs, which own physical properties, mortgage REITs focus on the lending side of real estate.
Private mortgage REITs—in particular—focus on originating and managing short-term loans secured by real estate.
The appeal of secure investments
In an era of market uncertainty, secure investments like debt funds and private mortgage REITs provide stability.
Here’s why they are often considered a cornerstone of a well-balanced portfolio.
Income generation
Both debt funds and mortgage REITs are designed to deliver consistent income to investors.
This makes them an attractive choice for retirees or others seeking a steady cash flow to supplement other income sources.
Lower volatility
Debt funds and mortgage REITs are less correlated with the stock market, which helps reduce overall portfolio volatility.
This insulation from equity market swings makes them reliable for preserving capital during downturns.
Capital preservation
The secure nature of these investments offers peace of mind for risk-averse investors.
Mortgage REITs, in particular, benefit from being backed by tangible real estate assets, reducing the likelihood of significant capital loss.
Why private mortgage REITs stand out
Private mortgage REITs, such as Marquee Capital Fund 1, offer unique advantages that set them apart from traditional debt funds or public REITs.
Real estate-backed security
All loans issued by private mortgage REITs are secured by physical real estate, providing a critical safety net.
In the event of borrower default, the REIT can recoup its investment by selling the collateral property.
Consistent returns
Private mortgage REITs focus on short-term loans with higher interest rates, targeting annualized returns that often exceed those of traditional fixed-income investments.
These consistent returns are distributed to investors, typically on a monthly basis.
Marquee Funding Group’s MREIT, Capital Fund 1, offers returns of 8%- 9% while investing in private deals outside of the MREIT can bring in 9.50%—12.00% returns.
Professional management
Experienced fund managers handle all aspects of loan origination, underwriting, and portfolio management.
This expertise ensures high-quality loans and diligent oversight, minimizing risks for investors.
Instant diversification
By investing in a private mortgage REIT, investors gain the keys to a diversified portfolio of loans spread across various borrowers, property types, and geographic regions.
This diversification reduces the risk of concentrated losses and enhances overall portfolio stability.
Real-world benefits of investing in debt funds and mortgage REITs
Investing in debt funds and mortgage REITs can provide tangible benefits that align with various investment goals.
Steady income for retirees
Retirees often prioritize investments that provide reliable cash flow without exposing their portfolios to excessive risk.
Mortgage REITs and debt funds meet this need by offering regular distributions backed by real estate or fixed-income securities.
Portfolio diversification
Adding debt funds or private mortgage REITs introduces an asset class that behaves independently from stocks for investors with equity-heavy portfolios.
This diversification helps reduce portfolio volatility and creates a more balanced investment strategy.
Inflation protection
While bonds and traditional debt instruments may struggle to keep up with inflation, mortgage REITs benefit from real estate’s inherent value.
Property-backed loans can adjust for inflation through higher interest rates, preserving purchasing power for investors.
Why private mortgage REITs are a smart choice for diversification
The cornerstone of successful investing has always been considered diversification— private mortgage REITs excel in providing it.
Uncorrelated returns
Real estate debt operates independently from stock and bond markets, allowing investors to balance their portfolios during economic uncertainty.
Multiple layers of security
Private mortgage REITs typically lend at conservative loan-to-value (LTV) ratios, ensuring the value of the collateral exceeds the loan amount.
This conservative approach reduces the risk of losses in the event of a foreclosure or Notice of Default when the home goes into a foreclosure sale.
Exposure to high-quality assets
Investors in private mortgage REITs gain access to loans secured by well-vetted properties.
Professional management teams conduct rigorous underwriting to ensure each loan meets strict quality standards.
Why Marquee Capital Fund 1 is a premier option
Marquee Capital Fund 1 offers an exceptional opportunity for investors interested in private mortgage REITs.
With decades of expertise in private lending, the fund is managed by industry professionals prioritizing security, performance, and investor success.
Key advantages
- Targeted high returns: The fund delivers consistent income through monthly distributions, targeting annualized returns that outperform traditional fixed-income investments.
- Real estate-backed security: Loans are secured by tangible properties, protecting investors.
- Diversified portfolio: Investors gain exposure to various real estate loans, reducing risk and enhancing stability.
The benefits of debt funds: The bottom line
Debt funds and mortgage REITs are ideal for investors seeking secure, diversified opportunities that deliver consistent income.
Private mortgage REITs, in particular, stand out as a real estate-backed solution offering high returns with lower volatility.
Whether you’re a retiree seeking steady cash flow, a portfolio manager looking to reduce risk, or an investor interested in alternative assets, private mortgage REITs like Marquee Capital Fund 1 offer a compelling way to achieve your financial goals.
Add a private mortgage REIT to your portfolio today. Give yourself the diversification, security, and income generation you need to thrive in today’s market.