Nexia Holdings recently announced a new strategy for its real estate operations. The company has plans to grow its real estate portfolio and create value for its shareholders by utilizing a strategy called “real estate backed securities.” The plan was designed to capitalize on large portfolios of residential real estate held by banks, individuals, corporations or other entities as a result of subprime or other foreclosed loans.
The company’s management team recognizes the devaluation of these properties as a result of tight credit markets and other factors, and that the investor with cash is able to purchase large groups of properties for pennies on the dollar. However, even if an investor has the cash, he/she must use great effort to get his/her cash back as soon as possible and redeploy the cash as many times as possible while the discounted prices are available.
Through Nexia, investors are able to invest in a real estate opportunity that has tremendous upside potential not typically available in highly priced securities. The company aims to build its balance sheet and cash flows so that it becomes a serious real estate concern. Once Nexia’s market cap is in excess of $75 million and its net worth exceeds $5 million, many regulatory goals will open to enhance the risk-to-reward ratio for investors.
The company also seeks to increase liquidity for its stock to build greater interest. Nexia will then be able to look to hedge funds, broker dealers and the public at large to become market participants. Right now few people know the company exists, but the company is making efforts to brand itself. The company isn’t looking to Wall Street for money, but is instead looking to Main Street, potentially giving millions of ordinary people the opportunity to invest with a little and gain a lot.
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