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.
|
Yield |
Risk |
Principle Protection |
We Lend, LLC |
10-14%* |
Moderate |
Yes, Senior (1st) lien position |
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 |
➔ 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.
➔ 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.
➔ We are committed to a $0 principal loss.
➔ Having a low ARV leaves a healthy buffer for any shift in the market.
➔ 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.
➔ 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.
➔ 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.
➔ 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.
➔ 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.
➔ Profit splits occur only after investors receive their preferred return.
➔ Principals have invested their own capital in The Fund alongside the investors.
➔ Real estate-backed protection.
➔ Senior first lien position.
➔ Loans are diversified geographically and across several resilient asset classes.
➔ Risk is spread across a portfolio of loans.
➔ 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.
➔ Quarterly distributions, with intent to accelerate to monthly distributions.
➔ Delivering attractive returns with first lien protection and limited liability to LPs.
➔ Predictable 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.
➔ Our yields are stable because they are not tied to the volatile stock market.
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.
*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.
Selling the loan transfers the risk to the note buyer
A non-consumer interest-only mortgage (BPL) secured by real estate investment properties.
Many of the consumer-facing regulations are inapplicable
Loans are primarily made to experienced real estate investors who are in the business of rehabilitating investment properties.
➔ Short Duration
— 12-18 months loan
➔ Fix & Flip
➔ Rental
➔ Multifamily
➔ New Construction
Up to 90% of purchase, not to exceed 65% to 75% of ARV
➔ 82%
— Avg. Leverage at Purchase
➔ 57%
— Avg. Leverage against the ARV
Option to finance up to 100% of renovation
The funds are not disbursed until the work is completed. Subject to physical inspection
Non-owner occupied residential
1-4 units
Multi-Family Properties
5+ units
Mixed-Use Properties
(Typically 50% Residential)
Mandatory 10-30% cash down payment by the investor
Nationwide, with a primary focus on the EAST COAST
Interest Rates range from
8-12%
➔ 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 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
➔ Prior to funding, we check that loans conform to the underwriting guidelines of our institutional loan buyers and/or our warehouse lender
➔ 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 loan is held back and funds disbursed based on the work completed by borrower
➔ Physical inspection with a full construction inspection report
➔ 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
Borrower completes application with supporting documents
Processing collects supporting documents (i.e. PFS, SREO, SOW), pulls credit, conducts background & OFAC search, & orders appraisal
Underwriting reviews all documents, background searches, credit reports, appraisal report, & validates property value
The loan is discussed with the counterparty for a second review & soft approval
Legal dept reviews title, property insurance, entity & other legal documents. Prepares loan documents & ensures compliance
Closing is scheduled and the loan is funded
The loan is typically replenished through a warehouse facility and/or sold to a loan buyer
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.
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