Invest With Us
Debt Fund Investing
The second option allows investors to fully embrace the Investing Passively 2 Live Actively vibe by participating in our debt fund.
When investing in a debt fund, your capital is pooled together with other investors in the fund, and the money is then lent out as private loans. We use the same underwriting and evaluation criteria for both brokering and debt fund investing.
While brokering may initially sound like a higher rate of return, those annual interest rates on the promissory note are only fully earned if the loan is kept out for the duration of one year. If an investor sells the property or refinances the loan before the end of the period, the capital is returned to the capital partner who provided it, waiting for another opportunity to come their way in the form of another loan. This could be anywhere from a couple weeks to a couple months, depending on your loan criteria, and the amount of the new loan may not be the full amount you have available to deploy, so some of that additional capital may not get fully deployed again.
When raising capital from passive investors, the SEC requires businesses to file for an exemption to raise capital legally. The exemption we have chosen is known as a Reg D, 506c offering.
If you are familiar with the phrase “syndication”, this is often the exemption used in syndications. Syndications typically are raising capital for that 20% to 25% down payment, and the remaining 70% to 75% of the purchase price is secured with debt.
Rather than being an investor in the top 20% of the capital stack (the most at risk if the property doesn’t perform or there is a market correction), debt funds provide capital for loans that are backed by real estate.
In the example above, a debt fund would come in with 70% to 75% of the purchase price and maintain a 1st lien position on the title of the property. Equity investors in a syndication do not have a recorded lien claim to the property the syndication is purchasing.
Benefits of a Debt Fund:
- No need to review individual lending opportunities.
- Capital is working 24 hours a day, 7 days a week, 365 days a year.
- The amount invested earns a return the entire time.
- Diversification across multiple projects, borrowers, types of property, and markets.
- With a conservative loan to value assessments, the capital secured against the asset remains below the value of a property, even if the market softens.
- Quarterly distributions, updates, and statements about your investment
Who Might Be A Good Fit for a Debt Fund:
- If you are an accredited investor according to the SEC guidelines. Learn more HERE
- If you want to deploy capital without active management or going through loan files.
- You are seeking some diversification within your portfolio, such as adding more real estate to a stock portfolio, lending in markets outside of your own, adding different asset classes, or having multiple borrowers for a smaller amount of capital.
- If you fully want to embrace the Invest Passively 2 Live Actively lifestyle!
If you are an accredited investor please feel free to reach out so we can share additional information about the debt fund with you. We’d like to get to know you as a person rather than point you to an investment portal, so let’s chat and see if an investment in our Lend2Live Debt Fund helps you get closer to your goals.
We have people from all over the country reaching out wanting to learn more about investing with us!
We are humbled and honored at such requests!
Depending on your long-term goals, current time commitments, and how you want to invest, we have several different options, so there is something for everyone!
We do encourage you to reach out to your financial, legal, and tax professional that is familiar with your finances and goals before investing, as we cannot make investing-related recommendations.
We are not financial advisors, hold any professional status for tax advice, nor represent ourselves to be attorneys, and do not claim to have a deep and thorough understanding of the law.
Private lending is regulated at the individual state level, so what may be legal in one state could be illegal in another.
We recommend reaching out to an attorney familiar with lending in your particular state for any guidance about lending laws in a specific state.
We personally recommend Geraci LLP, as a nation-leading private lending firm. They can advise clients in all 50 states about lending laws and licensing requirements.
You may have heard us speak on a podcast or read our book, and something clicked with you! Private lending sounds like something you want to try, but aren’t sure you can go it alone. We are here to help!
Private Money Matchmaking (Direct Placement)
The most active form of investing with us would be a process we call private money matchmaking. In this structure, you are the lender on record, the capital comes from you to fund the entire loan amount, and the payments will be handled through a loan servicing company.
Benefits we provide when Private Money Matchmaking:
- You will get an opportunity to review the high-level details of a lending opportunity and ask questions about the borrower or property.
- We will do the due diligence including having the borrower sign documents relating to the origination of the loan, appropriate disclosures as necessary, and collecting documentation from the borrower and vendors in the transaction.
- Coordinate the creation of loan documents for closing after you approve the loan.
- Provide instructions on how to fund the loan when it comes time to close.
- Help set up a loan servicing company to collect and disburse payments.
- Provide support to answer questions about the loan after it closes.
Who Might Be a Good Fit For Private Money Matchmaking:
- If you are interested in learning more about private lending but not ready to go it alone.
- If you want to have a 1099-INT for the interest income for tax purposes.
- If you want to build a history of loans funded in your name/business name.
- If you have knowledge about private lending, but want to spend your time doing something other than originating loans and processing documentation from potential borrowers.
- If you have retirement capital you want to use for a private loan.
If you are interested in having us help place your capital into a qualified borrower’s loan where we do the underwriting and due diligence on the borrower please follow this link to learn more about private money matchmaking with Lend2Live through Flynn Family Lending, the family business Beth is a managing partner of in the state of Washington.