Why Debt Investing Outperforms Traditional Buy-and-Hold for Investors?

Hardworking individuals never learn how to make their money work for them. Investing smartly is the key to long-term success. Today's episode talks about earning profitable returns through debt lending, rental properties, and diversifying your portfolio.

Harmonie Borden took a leap of faith into real estate as she moved to Utah mid-covid. Within 7 months, she had hit her family's 3-year financial goals.

Harmonie now raises capital for secured real estate deals so investors can passively build wealth without managing every detail. She's also VP of Elevate Côte d'Ivoire, a nonprofit creating jobs and education across Africa.

Here is a preview of what you'll learn in this blog:

• How to get started as an investor among unpredictable circumstances

• How to choose a great market for investment purposes

• The truth about debt investing

• Common mistakes made by investors when lending money

How to Get Started as an Investor Even When Circumstances Are Not In Your Favor

Harmonie worked in healthcare for military families for over a decade. Many people leave their W-2s because they hate their jobs, but Harmonie actually loved what she did.

"Actually, my husband pushed me into real estate. We had a few properties and my husband used to tackle those. I was only signing papers," Harmonie explains.

"I had a lot of time when I was stuck in a hotel room with my 12-year-old son during covid-time. I took some online classes and realized that many people need to learn about investing. Real estate investing could be a channel for helping people and touching lives. I was always passionate about helping others, but my career as a healthcare provider didn't give me a scalable opportunity."

How Do You Choose a Great Market for Investment Purposes?

Harmonie started investing in Utah, which is a great market for investors.

"Entrepreneurship is supported in Utah, no matter what you are doing," she says. "The market was crazy when I first started my journey. You had to go $100k above the appraisal to acquire that property. I had to look at 100 homes with my agent when I was searching for a residence."

The first deal Harmonie acquired was advertised as "for sale by owner." The homeowner was retiring. After several calls, she got an appointment to discuss her goals. They were able to create a win-win situation. Harmonie acquired the house at a discounted rate, did some renovation work, and used the BRRRR method to refinance the house. As of today, she and her husband don't focus on rental properties, but all their properties are under seller financing.

"When choosing a market, it's important to understand local laws. Utah is a non-disclosure and non-judicial foreclosure state. If you have to take ownership of a property, you can do so without involving a court," Harmonie notes. "The unique laws of different states present both opportunities and challenges for investors. However, Utah has proved to be a great market for debt-lending purposes."

How Did Harmonie Accomplish 3-Year Financial Goals Under 7 Months?

"Our financial success came through diversifying our investment efforts. Lending debt on properties is a safe investment. My husband is a licensed contractor and I am an agent. We take different roles," Harmonie shares. "We have invested both in stocks and equities other than real estate. So it's a combination of these efforts that actually led to a quick accomplishment of our goals."

Debt Investing: How to Evaluate a Deal for Safety and Profit

Pursuing lending deals makes sense in a hot market. In a market like Utah, Harmonie looks at a 6-month timeline: 3 months for renovation and 3 months for selling the property. She works alongside her borrowers to review the process each month.

"We look at market growth on a monthly basis. Our investors may be excited about ARV but our data gives us an accurate picture. If the market is slowing down, ARV will also drop," she explains.

Harmonie cautions that many investors make the mistake of doing deals without really protecting themselves. She shares several key tips for avoiding common pitfalls:

• Not diversifying is a big problem. Never put all your eggs in the same basket.

• Understand the legal side of investing in your area. Always review all numbers and make sure you understand the data.

• Learn how to structure a deal and protect your lenders.

• Never invest with someone on your first call. Get to know the borrowers before handing over the funds.

The Sure-fire Way to Eliminate Self-Doubt

Many smart investors want to start investing in real estate, but doubt always stops them. Harmonie mentions that doubt can be eliminated to an extent if you are leaning on your strengths.

"When you are new, start small. Pick your personal strengths and choose your investing strategies," she advises. "I love talking to people. My husband loves numbers. So we both handle different aspects of our investing business. We don't have to rely on our weak points. We can use our strengths."

Non-profit, Building Wealth, and Creating a Global Impact

Harmonie is the Vice President of Elevate Côte d'Ivoire, a nonprofit focused on job creation and education across Africa.

"We want to teach resilience and empower people to do more, especially in countries where they don't have the opportunities the way we do here," Harmonie says.

"We create jobs that will help them grow. Our virtual assistance program helps them make five times more than their minimum wage. Our VAs love giving back to the communities. Right now we're working on opening a university that will issue engineering degrees."

She describes the nonprofit's unique structure: "It's almost like a not-for-profit because any profit earned goes right back into it, and we fund on-the-ground work. We're having our team go to orphanages and do cleanups at hospitals. Our program sponsors widows who can't afford school for their kids. Our partner has a rice farm that produces and sells rice, but every year we're also taking portions of that and giving it away. Every month there's some kind of project going on."

What's Next for Harmonie on a Personal and Professional Basis?

Harmonie wants to continue learning about finances and investing strategies. She wishes she had started sooner because investing gives you opportunities for growth and the ability to make an impact.

Personally, she would like to travel more and see family and friends more often. "We're going back to Africa next year for our grand opening of the college. My goal is to make sure Elevate continues to grow," she shares.