Missouri
I make 100% roi on a 100k portfolio every year.
- Thread starter BondingInvestor
- Start date
Of course it's true, I didn't make this post to bull shit you guys or to show off, I did it to show that there's unconventional ways to invest and make good money. Are bonds considered sleazy? Yea probably so, but I don't care it provides me a good return on money that I already have invested. I still sleep like a baby every night.
He's not very well Like by most professional agents. He is what gives the business a bad name. I despise people like him in the bonding business.I am sure OP hedges with this:
It's a perfect inperfect system. We could privatize defendants release. Then we the tax payers would pay for the supervision while they wait trial. I don't use one penny of tax payers money and provide the same service.
We indemnify the bond, so the defendants family is responsible for the recovery fee. So the defendant would be back in jail and his family would owe money.
Hopefully I answered most of your questions. Like I said I didn't make this post to show off, I did it to show that unconventional investments with good returns are around. You have to do your due diligence and it's no free lunch. On the scalability aspect you can only make so much doing this alone. To scale up you need to hire sub agents. A sub agent has power of attorney to write on your behalf without you being present. They receive 50 percent of the premium for this. Sub agents have to write very conservatively because you are only receiving half the premuim. A sub agent can only make about 45k a year max. They are trained to do a in-depth background and asset/title check on every defendant. The bonds are also consigned to indemnify it from loss. We also sometimes covertly put gps tracking devices on vehicles and have programs that will track phones. They agree to this on the bond contract. I haven't scaled up because I'm not ready for that commitment. My long term goal would be to scale up then hire an agent to supervise it and be hands off and make complety passive income like an agent I know. The largest bond agent in my state has roughly 125 sub agents, At least one in every county.
Bonding provides me a good return on my money and I enjoy helping people. Also many of you are already investing in bail bonds passively, surety companies back bondsmen when they don't want to self insure themselves with assets. In return they get between 18-22 percent of the gross premiums payed. Those surety companies are backed by some of the biggest investors on wall street. Berkshire Hathaway has a substantial investment in them.
Bonding provides me a good return on my money and I enjoy helping people. Also many of you are already investing in bail bonds passively, surety companies back bondsmen when they don't want to self insure themselves with assets. In return they get between 18-22 percent of the gross premiums payed. Those surety companies are backed by some of the biggest investors on wall street. Berkshire Hathaway has a substantial investment in them.
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The key is you last sentence, risk. It's not clear that the risk adjusted return of this investment type is any higher than the risk adjusted return of putting your money in a CD in a bank. People who talk in terms of absolute ROI rather than risk adjusted return are probably both unaware of the concept and being fooled by a big number without fully taking into account the risk that comes with it. Everyone does it when the risk adjusted return is higher than T-bills. Otherwise it's just selecting your own point on the risk aversion/seeking continuum.
" I write on average 1.5 million in bonds per year, I make 10 percent of that amount in premiums roughly 150k. I have a 1 percent forfiture rate, meaning the defendent failed to appear and was not located, btw the courts give me up to two years to find them so forfiture is extremely rare. My average gross return is 135k per year on a 100k portfolio. "
The risk that a larger amount of people skip bail and leave you holding your nutsack is the same risk as selling credit spreads all year long pretending to make huge return on actual capital but not the actual return on the leverageed margin/risk.
If your $100,000 portfolio is making $150,000 a year on $1.5 million of actual exposed risk/leverage, then you are making about 10% a year gross. Less than 10% if your average return is $135k.
yes...your actual return on risk capital is LESS THAN 10%.... what a genius you are. I am surprised most of you missed this.
The fact that your ignorance overlooks that makes your post look like a shill shit show...
Cannot believe how noaive some people are.
Hey I am making 10% a year on a highly leveraged SERVICE I provide.... yes that is the stupid part, you are not making an investment, you are providing a service of lending out money in a high risk situation.
Your BUSINESS returns 10% gross a year on risk adjusted capital with potential for wipeout very high. This is a shit business, not an INVESTMENT.
The risk that a larger amount of people skip bail and leave you holding your nutsack is the same risk as selling credit spreads all year long pretending to make huge return on actual capital but not the actual return on the leverageed margin/risk.
If your $100,000 portfolio is making $150,000 a year on $1.5 million of actual exposed risk/leverage, then you are making about 10% a year gross. Less than 10% if your average return is $135k.
yes...your actual return on risk capital is LESS THAN 10%.... what a genius you are. I am surprised most of you missed this.
The fact that your ignorance overlooks that makes your post look like a shill shit show...
Cannot believe how noaive some people are.
Hey I am making 10% a year on a highly leveraged SERVICE I provide.... yes that is the stupid part, you are not making an investment, you are providing a service of lending out money in a high risk situation.
Your BUSINESS returns 10% gross a year on risk adjusted capital with potential for wipeout very high. This is a shit business, not an INVESTMENT.
Long term data of bail bond investing, over 50 years worth, shows a 9 percent return vs liabilty. But liabilty is not actual money invested, what I mean is that every bond doesn't really have 100 percent cash or asset backing. Missouri uses the ×15 rule, assets times 15 equals amount you can have in liabilty. Also no one bond can be more then half of assets. So my 100k gives me 1.5mil in total power and 50k max per bond. I write on average 1.5 million per year and make 10 percent on that. I have about a 1 percent loss on forfitures. The bonds are also consigned for the defendants to indemnify them. The cosigner is usually a family member, I then can get a judgment for my loss. Most pay but some don't, so I do have a small loss to gross premiums. We don't write a bond for everybody, we actually turn down a lot of them. Guys in this business that don't do due diligence make a ton of money the first 2 years then go out of business on their 3rd or 4th year when all the bad bonds they wrote start getting final judgment of forfiture.
Not just poor people use this service. If you have a large bond say 50k, you have to have a family member or friend physically bring 50k in cash to the jail to post it. That money is then tied up sometimes for years while the case is progressing. Also the person who is charged is entitled to the cash after the case is over, so sometimes friends are hesitant of putting up large bonds because they have to trust the friend to give the money back, if he doesn't there is no recourse. So most people would rather pay a 10 percent fee for a surety bond and post that instead.
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Like the billions in risk that car insurance and health insurance company's have? If everybody on a policy wrecked they would go out of business? Zero chance of a wipe out no one bond can be over 50k all bonds are indemnified also. Any incurred loss results in loss of collateral or judgments and wage garnishment. Cosigners are thoroughly credit checked. I guess some of the largest surety companies in the busiemss, Berkshire Hathaway being a large underwriter have been losing money for 75 years in this business. Probability models. You don't bond out every tom dick and harry. They have to pass a risk assessment. If somebody has ever missed court in their life the are rejected unless they put up full collateral to back the entire bond. If somebody lives out of state they are rejected without full collateral. Lifelong locals with minimal criminal history with assets is are core customer.
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