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Brosnan Realty Group, Inc | 617-787-2860 | kieran@BrosnanRealty.com


Posted by Brosnan Realty Group, Inc on 4/4/2021

Image by Ulrike Mai from Pixabay

If you're considering getting into the world of real estate investing, there are some basic terms that are important to understand. Buying and selling property is, of course, one way to invest, but there are other investments that offer favorable returns. However, it can sometimes be difficult to master the confusing alphabet soup of investment opportunity.

Packaged investment products include the Asset-Backed Security (ABS) and a Collateral Debt Obligation (CDO). In some ways, they are similar; each is typically bundled as a group investment for marketing purposes. Financial return is realized as payments are made by the pool of consumers included in the group. 

The ABS evolved historically, beginning in the 1980s, with the lender practice of bundling mortgage-backed securities for resale, primarily to other institutions. Today the practice continues, but mortgage debt is classified as a CDO, with specific real estate as the collateral. It is a specialty designation under the umbrella of asset-backed securities. The breakdown can be complex, and terms are sometimes confusing.

Financing that comprises CDO debt includes all the underlying characteristics of the ABS, in addition to the specialized assets of both commercial and residential Mortgage-Backed Security (MBS) or REIT (Real Estate Investment Trust) debt. A unique type of CDO that only includes mortgages is known as a CMO, referring to Collateralized Mortgage Obligation. 

Most investors really don't need to know more, but there are other designations that are commonly used:

  • A CLO is the term for Collateralized (Bank) Loan Obligation;
  • A CBO designates a Bond Obligation;
  • Credit-backed debt is sometimes referred to as synthetic CDO to distinguish it from cash-backed debt.

Various types of CDO debt are batched into three (or more) classes, known as tranches, with varying degrees of risk and return. Although the maturity level may be the same, an Equity Tranch investment offers the highest potential return but bears the lowest credit rating. A less-risky Senior Tranch boasts a higher credit rating, and the Mezzanine Tranch is in the middle.

Typically, an ABS investment package comprises credit card debt, student loan debt, home equity loans, auto loans, and large sum debt-repayment contracts for other goods, with no mortgages in the package. 

An investor in either an ABS or CDO earns a return, in part or in full, as the pool of debt is repaid by the individuals whose loans have been pooled. The risk of default is spread over the spectrum of loans, and investor risk is assessed, largely in proportion to the number and type of loans included in the package. 

These various types of investment packages are usually marketed only to institutions, rather than to individual investors, however there are ways for individual investors to purchase shares through the investment firm.





Posted by Brosnan Realty Group, Inc on 6/16/2019

Making market projections is hard to do. In real estate, it is an exact science that requires a lot of thinking and a lot of due diligence. With a lot of economic and market factors, who would have thought they must also consider climate factors when investing in the real estate market. 

It is incredible how far the world has come in terms of real estate projections. It has taken into account a lot of factors that make investing in real estate easier.

If you are environmentalist, and a smart investor at that, you probably want a glimpse of the real estate projections that consider the climate.

The following are the answers to how climate change will affect the real estate market:

  • Projections show that there would be less demand for waterfront homes. Unless you are filthy rich, you would not want your property cost to go up the roof during the rainy season. It has become a practical custom for individual home buyers to focus less on demanding a waterfront home and instead have a pool if their budget can cover it. Given that there are so many floods, hurricanes, and storms that come along the way, it has become impractical to invest in a waterfront home. It seems like a reality that real estate agents selling waterfront homes have learned to accept.
  • Most real estate professionals project higher insurance premiums for real estate properties to trend in the coming years. With climate change, insurance companies are facing higher risks, so it becomes a must for them to raise prices.
  • Projections also expect higher property taxes to come out of upcoming legislation. With the government's need to provide protection and environmental upkeep, expect even property taxes to go up because of climate change.
  • The increased property value for some homeowners is the only good thing out of the real estate projections. More houses can get more equity and homeowner should take advantage of this.

It is easier to make some changes and follow the projections of the market with a little knowledge. Individuals can always see the potential of what they are doing with the help of the right market factors. 

If you are ready to invest in climate change-ready houses and properties, contact a real estate professional today and see what an expert can do to help you. 





Posted by Brosnan Realty Group, Inc on 10/30/2016

Buying a rental property is often one of the best things that first time home owners can do. They will often live in one of the units, and rent out the other units of the home. There’s many things to consider before you buy a rental property. Here, we’ll break down the good and the bad of being a landlord and owning your very own rental property. We’ll also show you the steps that you should take before you sign on the dotted lines. Gather As Much Information As You Can Before you make the decision to become a landlord, gather as much information as you can. Talk to people who are landlords and who own rental properties. See how people feel about living in their own rental properties. You can also read and research as much as you can on the topic for a broad perspective. Consider If You’re Ready To Be A Landlord There’s so many things to consider when it comes to buying a rental property. One of the biggest things to think about is if you truly are ready to become a landlord. There’s a lot of responsibility in being a landlord. Also, you’ll need to be prepared to deal with tenants and various problems that may come up with the property. Before you make the leap to becoming a landlord, think long and hard about how you’ll handle the responsibility and time commitment. Make Sure You Have Plenty Of Cash On Hand To purchase a rental property, you’ll need to secure a sizable downpayment for the mortgage. It’s also important that you have a reserve of cash ready for repairs that may need to be done around the building before it can be rented out. You’ll most likely need to spend some money first before you start making money on your rental property. Decide If You Want To Live On The Property For first-time homebuyers, purchasing a rental property and living in it can be a great decision. You’ll save on your monthly mortgage all while building your own capital. While you don’t always have to live on site when purchasing a rental property, it’s a great financial option to consider. Think About Hands-On Management While you may decide to pay someone to manage your rental property, you may need to deal with all aspects of your property yourself at first. Part of the job will include dealing with tenants as well as scheduling and assessing repairs. You should estimate that about ten percent of the rent that is collected will go towards these purposes. As a landlord, you’ll also need to be sure that the tenants you house are dependable and that the building is in the best shape it can be in.  




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