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WE LEND, LLC
Fund name: States Capital

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We Lend offers accredited investors an opportunity to diversify their portfolio by capitalizing on real estate - without the typical risks of property ownership. Our mission as a private debt fund is to acquire, finance, and trade business-purpose loans secured by first-position liens on real estate. As the first-position lien holder, our business model provides inherent security to investors while consistently delivering high-yield returns.

Become a Lender,
Not a Landlord—NOW.

    

OVERVIEW

We're in the business to
Make, Purchase, Fund, Acquire
and/or sell Business Purpose Loans (BPL’s) secured by first position liens on real property located across the US—primarily on the east coast.

Target
Annual
Return*

10-14%

Real Estate Private Loans VS Other Asset Classes

 

Yield

Risk

Principle Protection

We Lend, LLC

10-14%*

Moderate

Yes, Senior (1st) lien position
backed by real estate

Equities & Securities 

4-6%

High

No

Certificate of Deposits

1-2%

Low

Yes

Corporate Bonds

3-4%

Low

No

US Treasuries

1%

Low

Yes

Real Estate Rentals

4-6%

Moderate

Sometimes

 

Through our subsidiary (We Lend), the management team has originated 800+ loans.
Loans are primarily made to experienced real estate investors who are in the business of rehabilitating investment properties
The Fund is run by experienced real estate investors & lenders, which provides keen insight into how to be a creative and responsible lender
Principals of The Fund invested personal capital into The Fund

Through We Lend, the management team has originated 800+ loans.


Loans are primarily made to experienced real estate investors who are in the business of rehabilitating investment properties


The Fund is run by experienced real estate investors & lenders, which provides keen insight into how to be a creative and responsible lender


Principals of The Fund invested personal capital into The Fund

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BY THE NUMBERS


Management's Pedigree

Principle Loss

$0

Avg. Borrower Interest Rate

9.6%

Repeat Borrowers

63%

Loan Characteristics

$369K
Avg. Loan Amount

➔ Our average loan size and borrower sale price cater to the median cost of housing.

➔ We do not cater to the luxury market. There is a much larger pool of buyers in the median cost of housing category than there is in the luxury market.

89%
Borrowers are experienced Investors

➔ Experienced borrowers make healthy acquisitions and a lower amount of mistakes.

➔ They are also better equipped to navigate an up or down market or a shift in their business plan.

57%
Avg. Loan to After Repair Value

➔ We are committed to a $0 principal loss.

➔ Having a low ARV leaves a healthy buffer for any shift in the market. 

11 Months
Avg. Loan Term

➔ Being in a loan for a short period mitigates our risk of any shift in the market - this is done by design to mitigate market risk.

$2.6M
Avg. Borrower's Net Worth

➔ The borrower's net worth and liquidity is an essential factor in the underwriting process because it demonstrates that the borrower has the liquidity to finish the project, make on-time monthly payments, and pay off our loan.

693
Avg. FICO Score

➔ Having access to the borrower's credit gives us a glimpse into the borrower's financial stability and payment history.

➔ With an average FICO score of 693, our borrowers are institutional grade and have a proven track record of consistent and on-time payments.

45
Avg. Age of Borrower

➔ Our borrowers are seasoned and experienced. They have seen several market cycles, which gives them the ability to navigate the market with a high rate of success.

82%
Avg. Leverage at Purchase

➔ The borrower's skin in the game is a crucial part of our decision-making power. We want to make sure that the borrower is invested in every loan we make, and their investment must be considerable. 

Investor's Security

Alignment of Interest
Alignment
of Interest

➔ Profit splits occur only after investors receive their preferred return.

➔ Principals have invested their own capital in The Fund alongside the investors.

Alignment of Interest
Security

➔ Real estate-backed protection.

➔ Senior first lien position.


Alignment of Interest
Diversification

➔ Loans are diversified geographically and across several resilient asset classes.

➔ Risk is spread across a portfolio of loans.

Alignment of Interest
Underwriting

➔ Loans must meet stringent underwriting. We place a lot of emphasis on loan to value ratios, asset class & location, borrower experience, net-worth, FICO, etc.

Alignment of Interest
Distribution
Frequency

➔ Quarterly distributions, with intent to accelerate to monthly distributions.

Alignment of Interest
Passive 
Cash Flow

➔ Delivering attractive returns with first lien protection and limited liability to LPs.

➔ Predictable returns.


Alignment of Interest
Risk Adjustment
Returns

➔ While generating above-market returns, The Fund is able to reduce exposure to market volatility. A key function of this is the short duration of the loans. Most loans are repaid within 11 months.

➔ Fundamentally, investments in debt are less risky than an equity investment.

Alignment of Interest
Non-correlated
Returns

➔ Our yields are stable because they are not tied to the volatile stock market.

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What's Next?

Velocity of Capital

The Fund intends to sell loans in the secondary market to institutional loan buyers and/or replenish the loans through a warehouse facility, enabling The Fund to generate a higher yield & mitigate risk. 

Higher Yield Illustrated:

A loan is funded to a borrower at 9%. The loan is then replenished at ~5.5% or sold at ~7.5%. Once replenished or sold, the capital is re-invested into another loan. While The Fund only retains a ~1.5% to ~3.5% spread, repeating this transaction multiple times a month/year generates a higher yield than 9%.

FOR EXAMPLE:
Let’s say we fund and sell loans once a month, and we capture a 2% spread on each transaction.

2% spread  x 12 months =
24% Yield

*These statements reflect States Capital, LLC’s views and assumptions regarding future events and performance. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are important factors that could cause States Capital, LLC’s actual results to differ materially from those indicated in these statements.

Risk Mitigation

Selling the loan transfers the risk to the note buyer

Rate of Return

Growth of a $100,000 investment in 2018

Growth of a $100,000 investment in 2018

Preferred Return

7%

Target Annual Return

10-14%

    

Typical Loan Characteristics

Loan Types

A non-consumer interest-only mortgage (BPL) secured by real estate investment properties.

Many of the consumer-facing regulations are inapplicable

Borrower

Loans are primarily made to experienced real estate investors who are in the business of rehabilitating investment properties.

Term

➔ Short Duration
— 12-18 months loan

Loan Program

➔ Fix & Flip
➔ Rental
➔ Multifamily
➔ New Construction

Loan to Value

Up to 90% of purchase, not to exceed 65% to 75% of ARV

➔ 82%
— Avg. Leverage at Purchase 

➔ 57%
— Avg. Leverage against the ARV

Construction Financing

Option to finance up to 100% of renovation

The funds are not disbursed until the work is completed. Subject to physical inspection 

Asset Class

Non-owner occupied residential
1-4 units

Multi-Family Properties
5+ units

Mixed-Use Properties
(Typically 50% Residential)

Borrower Down Payment

Mandatory 10-30% cash down payment by the investor 

Geography

Nationwide, with a primary focus on the EAST COAST

Rate

Interest Rates range from
8-12%

Strict Underwriting

Property

➔ Location - market conditions 
➔ Property condition 
➔ Complete Appraisal Report 
     - Vetted & insured 
     - Conservative valuations 
     - ARV, AS-IS, and/or rent schedule reports
➔ Independent comparable search 
➔ Tax Records - how is it taxed, are there any tax liens? 
➔ Department of Building 
➔ SOW & Property Inspection Reports 
➔ Transaction History - how has the property traded in the past? 
➔ Confirming the transaction is arms-length 

Borrower

➔ Borrower Experience: we look closely at a borrower’s experience. While most of our borrowers are experienced, a loan issued to an inexperienced borrower is compensated by lower leverage. 
➔ Net worth & liquidity has to meet specific thresholds 
➔ Full tri-merge credit report - tradelines, usage, history, etc
➔ Full background & OFAC search on the borrower
➔ Borrower must have skin in the game - equity invested at acquisition & construction

Warehouse Lender and/or Loan Buyer Review

➔ Prior to funding, we check that loans conform to the underwriting guidelines of our institutional loan buyers and/or our warehouse lender

Legal Review & Approval

➔ Our legal team is vetted, insured, and highly experienced working with major lenders and loan buyers
➔ Strict mortgage documents
➔ Reviews title to ensure that the lender's policy is secured

Construction Finance

➔ Construction loan is held back and funds disbursed based on the work completed by borrower
➔ Physical inspection with a full construction inspection report

Title Review & Insurance

➔ Chain of title
➔ Encumbrances
➔ Insurance: Builders risk req’d. Compliance verified by our team & a 3rd party 
➔ Bind title insurance with a lender’s policy

TYPICAL LOAN

Funding Process

1.
LOAN ORIGINATION

Borrower completes application with supporting documents

2.
PROCESSING

Processing collects supporting documents (i.e. PFS, SREO, SOW), pulls credit, conducts background & OFAC search, & orders appraisal

3.
UNDERWRITING

Underwriting reviews all documents, background searches, credit reports, appraisal report, & validates property value

4.
WAREHOUSE LENDER/
LOAN BUYER REVIEW

The loan is discussed with the counterparty for a second review & soft approval

5.
LEGAL REVIEW

Legal dept reviews title, property insurance, entity & other legal documents. Prepares loan documents & ensures compliance

6.
CLOSING/FUNDING

Closing is scheduled and the loan is funded

7.
LOAN REPLENISHED OR SOLD

The loan is typically replenished through a warehouse facility and/or sold to a loan buyer

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We Lend is a private money lender based in New York with a nationwide reach, focused on servicing real estate investors by providing quick and low cost capital on their investment properties.

  • 212-777-7780
  • info@welendllc.com
  • 54 W 40th Street NY NY 10018
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