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    WE LEND was founded to MAKE, PURCHASE, FUND, ACQUIRE

    and/or sell private (hard money) loans secured by first position liens on real property, primarily located on the east coast

    PROVEN HISTORY

    BY THE NUMBERS

    Key Facts & Figures as of We Lend inception since 2018*

    Note: The facts and figures contained herein are representative of We Lend, LLCs performance. Past performance is not a guarantee of future results. *Data as of 11/08/2022

    $455MM

    Total Amount Funded

    $0

    Principle Loss

    ~1,200

    Loans Funded

    9.5%

    Avg. Borrower Interest Rate

    82%

    Avg. Leverage at Purchase

    250+

    Loans Currently Co-Serviced

    63%

    Of Loans are Repeat Borrowers

    Through We Lend, the management team has originated ~1,200 loans, a face value of $455MM+

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

    Principals invested personal capital into the fund

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

    The Fund intends to sell selected loans in the secondary debt market. This enables The Fund to capture a yield (1.5% to 3.5%) at the sale while transferring the default risk & reinvesting the replenished funds, creating a higher alpha in the portfolio and minimizing risk

    BY THE NUMBERS

    Loan Characteristics

    Note: The facts and figures contained herein are representative of We Lend, LLCs performance. Past performance is not a guarantee of future results* 2+ Investments

    $381K

    Avg. Loan Amount

    12 Months

    Avg. Loan Term

    58%

    Avg. Loan to After Repair Value

    $2.6M

    Avg. Borrower’s Net Worth

    44

    Avg. Age of Borrower

    85%

    Of Borrowers are Experienced Investors*

    695

    Avg. FICO Score

    INVESTOR SECURITY

    Alignment of Interest

    Principals invested their capital in The Fund alongside investors

    Profit splits occur only after investors receive their preferred return

    Security

    Safer part of the capital stack

    Real estate-backed protection

    Senior (1st) lien position

    Diversification

    Loans are diversified geographically and across several resilient asset classes (residential focus)

    Risk is spread across a portfolio of loans

    Distribution Frequency

    Instant Cash-Flow. The Fund makes monthly distributions

    Transparency

    The Fund retained Concept Fund Services (a division of Berdon LLP) to provide professional fund administration & reporting services, and we use FCI Lender Services to provide loan servicing & reporting services

    Passive Cash Flow

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

    Predictable and consistent returns

    Velocity of Capital / Loan Sales

    The Fund intends to sell selected loans in the secondary market, enabling us to capture a yield at sale while shifting the default risk, and reinvesting the replenished funds into another loan. The velocity of the fund-sell strategy allows for multiple transactions during the term, creating a higher alpha in the portfolio and mitigating risk

    Underwriting

    Loans must meet our stringent underwriting guidelines & those of our institutional loan buyers. We place a lot of emphasis on loan-to-value ratios, asset location, borrower experience, borrower FICO, and/or asset class

    We must fund institutional-grade loans to ensure the loans can be replenished through a credit facility and/or sold

    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 credit facility, enabling us to generate a higher yield & mitigate risk

    Note: 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.

    Higher Yield Illustrated:

    A loan is funded to a borrower at 12%. The loan is then replenished at ~7.5% or sold at ~10.5%. Once replenished or sold, the capital is re-invested into another loan. While The Fund only retains a ~1.5% to ~4.5% spread, repeating this transaction multiple times a month/year generates a higher yield than 9.5%.

    For example:

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

    loan_spread

    Risk Mitigation

    Selling the loans transfers the default risk to the note buyer.


    Rate of Return

    PREFERRED RETURN

    7%

    TARGET ANNUAL RETURN*

    10-14%

    TARGET IRR

    12-22%

    These returns were achieved without enhancements from selling loans to loan buyers & without the use of a credit line for replenishment purposes

    TYPICAL LOAN CHARACTERISTICS

    Loan Type
    A non-consumer, interest-only, Business Purpose Loan (BPL) made to real estate operators and investors, and secured through a first lien mortgage against real estate. Also known as: Hard Money Loan
    Property Type
    • Non-owner occupied residential: 1-4 units
    • Multi-Family Properties: 4+  Units 
    • Mixed-Use Properties: (Typically 50%+ Residential)
    Loan Programs
    • FixNFlip
    • Rental
    • Multifamily
    • New Construction
    Loan to Value

    Up to 85% of the acquisition price (compensating circumstances must exist for 90% leverage)

    • 82% — Avg. Leverage at Purchase
    • 57% — Avg. Leverage against the After Repair Value
    Geography
    • Nationwide, with a primary focus on the
      EAST COAST
    Borrower
    • Loans are primarily made to experienced real estate investors who are in the business of rehabilitating investment properties
    Down Payment
    Mandatory 15-35% cash down payment by the borrower
    Rates
    Interest Rates range from 9-12%
    Term
    • Short duration: 12 month loans
    • Extensions not guaranteed: 3-6 month intervals on case by case basis
    Construction Financing
    • Option to finance renovation
    • If funded, the funds are not disbursed until the work is completed by the borrower. Subject to physical inspection

    Strict Underwriting

    6-point review: Our underwriting happens in-house. Being former real estate investors enables us to spot a bad loan and/or borrower very quickly

    • Property

      • Location - market conditions
      • Property condition 
      • Complete Appraisal Report
        • Vetted & insured appraisers
        • Conservative valuations
        • ARV, AS-IS, and/or rent schedule reports
        • Stress-test the appraisal
      • Independent comparable search
      • Tax Records - how is it taxed, are there any tax liens?
      • Department of Building Records
      • 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 - review the borrower’s tradelines, usage, payment history, etc.
      • Conduct a full background search on the borrower
        Borrower is required to have “skin in the game” - equity invested at acquisition & construction 
    • Credit Facility and/or Loan Buyer Review

      • Before funding, we check that loans conform to the underwriting guidelines of our institutional loan buyers and/or our credit facility
    • Title Review & Insurance

      • Chain of title
      • Encumbrances
      • Property Insurance: Builders risk is required. Compliance is verified by our team & a 3rd party
      • Bind title insurance with a lender’s policy
    • Construction Financing

      • Construction loan is held back. Funds disbursed based on work completed 
      • Physical inspection with a full construction inspection report
    • Legal Review & Approval

      • Our legal team is vetted, insured, and highly experienced working with major lenders and loan buyers
      • Strict mortgage documents with Personal Guarantees from borrower
      • Reviews title to ensure that the lender's policy is secured
    • Location - market conditions
    • Property condition 
    • Complete Appraisal Report
      • Vetted & insured appraisers
      • Conservative valuations
      • ARV, AS-IS, and/or rent schedule reports
      • Stress-test the appraisal
    • Independent comparable search
    • Tax Records - how is it taxed, are there any tax liens?
    • Department of Building Records
    • 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 - review the borrower’s tradelines, usage, payment history, etc.
    • Conduct a full background search on the borrower
      Borrower is required to have “skin in the game” - equity invested at acquisition & construction 
    • Before funding, we check that loans conform to the underwriting guidelines of our institutional loan buyers and/or our credit facility
    • Chain of title
    • Encumbrances
    • Property Insurance: Builders risk is required. Compliance is verified by our team & a 3rd party
    • Bind title insurance with a lender’s policy
    • Construction loan is held back. Funds disbursed based on work completed 
    • Physical inspection with a full construction inspection report
    • Our legal team is vetted, insured, and highly experienced working with major lenders and loan buyers
    • Strict mortgage documents with Personal Guarantees from borrower
    • Reviews title to ensure that the lender's policy is secured

    TYPICAL LOAN FUNDING PROCESS

    Loan Origination

    Borrower completes application with supporting documents

    Processing

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

    Underwriting

    Underwriting dept reviews all documents, background searches, credit reports, appraisal, & validate property value

    Credit Facility / Loan Buyer Review

    If the loan is to be replenished through a credit facility or sold to a loan buyer, then the loan is discussed with that party for a second review and soft approval

    Legal Review

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

    Closing/Funding

    Closing is scheduled, and the loan is funded

    Loan Replenished or Sold

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


    WHAT PRECAUTIONS IS THE FUND IMPLEMENTING TO REDUCE OUR EXPOSURE TO MARKET VOLATILITY?

    Tightened Lending Criteria and Underwriting

    Reduced our leverages, effectively requiring borrowers to have more skin in the game

    Stress Test Cash Flows

    Cash Flows: we analyze the property's current or potential cash flows to ensure that it will be sufficient to cover our mortgage and qualify for a refinance

    Increased Our Credit Standards

    Currently, 85% of our borrowers are institutional grade with high FICO scores, experienced, and HNW - we want to keep it that way

    Stress Test Appraisal

    Market Adversity: we stress test the property’s appraisal to ensure that the loans we make are conservative enough to be secured against value fluctuations

    WHY DO OUR BORROWERS NOT UTILIZE TRADITIONAL BANK FINANCING?

    Speed

    We fund loans in as few as 3 days. Borrowers use speed to their advantage when negotiating with their seller

    Asset Condition

    Traditional banks are unwilling to finance distressed properties

    Red Tape

    Banks have complex routines and procedures which make it difficult for the borrower to qualify

    Competitiveness

    Borrowers use a private lender as an advantage against mortgage contingent buyers

    Reliability

    Traditional banks lack the experience & understanding of the real estate investment space

    Guidance

    The Fund is run by experienced investors who can guide and consult the borrower through their investment process

    WHY INVEST WITH US?

    We Are Aligned

    GPs are invested alongside their investors

    GPs are not earning profits from States Capital until the preferred return is paid to our investors

    Loan Sales + Yield Enhancement + Risk Mitigator

    Selling loans enables States Capital to capture a higher yield while transferring the risk and reinvesting the replenished funds into another loan

    Diversification

    Loans are diversified geographically and across several resilient asset classes

    Risk is spread across a portfolio of loans

    Underwriting and Deal Flow

    Loans must meet stringent underwriting guidelines. We do not outsource our underwriting

    Principal Protection

    $0 principal loss

    Real estate-backed protection

    Senior (1st) lien position

    Safer part of the capital stack

    Transparency

    The Fund has a 3rd party fund administrator and loan servicer

    Experienced Fund Managers

    The Management team has originated ~1,200 loans, a face value of $455MM+ (& currently co-servicing ~250+ loans)

    While the team originated ~1,200 Loans, we’ve denied 3,000+ Loan requests—we’ve seen a lot

    The Mgmt team were real estate investors, specifically in the FixNFlip space, which provides keen insight into how to be a creative & responsible lender

    DISCLOSURE

    This presentation for We Lend, LLC and any appendices or exhibits (the "Presentation") have been prepared by States Capital, LLC for information purposes only. This Presentation is confidential and for its intended audience only. Recipients of this Presentation may not reproduce, redistribute or pass on, in whole or in part, in writing or orally or in any other way or form, this Presentation or any of the information set out herein. This presentation does not constitute an offer to sell or a solicitation of an offer to purchase limited partnership interests in any security. 

    Any prospective investor is advised to carefully review all of the private placement memoranda, operating agreement, and subscription documents ("Investor Documents") and to consult their legal, financial, and tax advisors prior to considering any investment in States Capital, LLC. The materials contained in this Presentation contain a summary and overview of States Capital, LLC as currently contemplated by States Capital, LLC  in order to obtain initial feedback from potential investors. States Capital, LLC may change some terms prior to the finalization of the Investor Documents. This presentation does not purport to be complete and is superseded in its entirety by the information contained in the Investor Documents. Past performance is not indicative of future returns or results. Individual investment performance, examples provided, and/or case studies are not indicative of the overall returns of States Capital, LLC.

    In addition, there can be no guarantee of deal flow in the future. Some of the statements in this Presentation, including those using words such as "targets," "believes," "expects,'' "intends,'' "estimates,'' "projects,'' "predicts,'' "anticipates,'' "plans,'' "pro forma,'' and "seeks" and other comparable or similar terms are forward-looking statements. Forward-looking statements are not statements of historical fact and reflect States Capital, LLC’s views and assumptions as of the date of the Presentation 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. States Capital, LLC’s confidential private placement memorandum. States Capital, LLC believes that these factors include, but are not limited to, those described in the "Risk Factors" section of the PPM.

    An Investment In States Capital, LLC involves Risk, And Numerous Factors Could Cause The Actual Results, Performance, Or Achievements Of States Capital, LLC To Be Materially Different From Any Future Results, Performance, Or Achievements That May Be Expressed Or Implied By Statements And Information In This Presentation. Actual Results May Vary Materially From Those Described In This Presentation, Should One Or More Of These Risks Or Uncertainties Materialize, Or Should Underlying Assumptions Prove Incorrect.