Reshaping HOA Investments: An Interview with HOA Invest

Introduction

The HOA investing landscape is changing rapidly given the current high interest rate environment and various new products and services being offered. Please find below our interview with an expert, Jessica McConnell of HOA Invest.

Improving Transparency and Streamlining Investment

CAM Advisors: Jessica, can you describe how HOA Invest started and the issues you aim to solve?

Jessica McConnell - HOA Invest (JM): Absolutely. I've worked in HOAs, associations, and golf clubs for nearly 16 years. I noticed a lack of clear investment processes. When I first started, I struggled to track down investments, connect with board members, and ensure transparency in financial decisions. Many boards were unaware of investment opportunities because communication would break down between advisors, managers, and board members.

My co-founder, Mark Thatcher, and I asked: How can we improve transparency and streamline investments? HOAs rely on investments for reserve needs and daily operations. Yet, there was no clear process. We built HOA Invest to provide transparency and structure where none existed.

CAM Advisors: Got it. So at that time, boards lacked clear investment guidance?

JM: Not necessarily bad guidance, but investments were an afterthought. Board members often delayed decisions for months, leading to idle funds. Investments would mature and sit in cash because no one was tracking them. This inefficiency meant lost returns. Our goal was to automate notifications and provide clear investment recommendations.

CAM Advisors: Why couldn’t top wealth management firms handle this?

JM: Traditional firms, like Merrill, Morgan Stanley, or UBS, wait for client instructions. They are not fiduciaries, so they don’t proactively advise. HOA boards often lack investment expertise, yet they must make financial decisions. Without a fiduciary, boards struggle to optimize their investments. We fill that gap by acting as fiduciaries and ensuring they get the highest, safest yields.

CAM Advisors: So HOA Invest is a fiduciary service with integrated tech?

JM: Yes. Our advisors are licensed SEC investment advisors. We custody assets through Charles Schwab Institutional, with some accounts also at Fidelity. HOA Invest’s technology ensures transparency, automates notifications, and keeps boards informed. Our system notifies managers and board members 90 days before investments mature, ensuring proactive decisions.

CAM Advisors: What were the first key issues you solved?

JM: Transparency and compliance. In California, the Davis-Stirling Act requires signatures from the treasurer and another board member for transactions over $5,000. Many boards weren’t collecting these signatures properly. Our platform automates this process, reducing delays and inefficiencies.

Another issue was tracking investments. Managers maintained separate spreadsheets, making investment oversight cumbersome. Our system centralizes this, removing the burden from managers and increasing efficiency.

Working With Management Companies and Boards

CAM Advisors: How does HOA Invest integrate with management companies?

JM: We work directly with boards while collaborating with managers. Managers oversee operations, while we ensure investment compliance and transparency. Our goal is to unburden managers by handling investment oversight.

CAM Advisors: How does this impact managers’ day-to-day work?

JM: It simplifies their role. Investments are complex, and managers aren’t financial experts. Our fiduciary service eliminates uncertainty, ensuring boards get the best returns while managers stay focused on operations.

CAM Advisors: How do you handle scalability?

JM: Each board is assigned an advisor from our team of 20. Our technology automates transparency and notifications, allowing us to efficiently manage numerous communities.

Further Growth

CAM Advisors: What’s next for HOA Invest?

JM: We’re expanding integrations with major accounting firms, growing nationally, and attending industry events. Our patent-pending technology streamlines investment management and compliance. New features, like automated account updates after board votes, will further enhance efficiency.

CAM Advisors: That sounds promising. Looking forward to seeing your growth!

JM: Thanks! Our goal is to support communities by improving financial transparency and efficiency.

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‍Capital CS Group, LLC is a registered investment adviser. This advertisement is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Capital CS Group, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Capital CS Group, LLC unless a client service agreement is in place

‍For more information on the HOA management industry, valuation metrics, or other questions, please contact contact@camadvisors.co or visit https://www.camadvisors.co/