Anyone who borrowed money to buy a house would know how much of a burden it is to pay off their mortgage. But now, there could be a way for homeowners to make it even. The investment I’m about to show you uses the money from other people’s mortgage payments to pay dividends to its investors. The return is pretty substantial. In the current market, the investment offers an annual dividend yield of 10.27%.
The company in question is Apollo Commercial Real Estate Finance Inc. (NYSE:ARI), a real estate investment trust (REIT) headquartered in New York City. While many REITs are in the business of owning and leasing properties, Apollo is a bit different. The company does not invest in physical properties directly. Instead, it specializes in commercial mortgages. Apollo REIT uses a direct origination platform to generate first mortgage and subordinate loans across a wide range of property types. These include residential, retail, healthcare, office, and industrial properties. The loan-to-value (LTV) ratio of the company’s first mortgages range from 0% to 65%. For subordinate loans, LTV is typically between 50% and 75%.
Source: Income Investors
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