Mortgage Note Investment: Answering Top Investor Questions

Q&A from the Webinar:

Q. What is the difference between tax-advantaged and tax-deferred?

A. A tax-advantaged structure distributes dividends rather than interest.

 Q. My IRA contribution is only $7,500. I was to invest more, can I move some of my Fidelity IRA to you?

A. Yes, you can invest $7,500, as the minimum is $2,500. Since we are privately traded, you cannot invest with a Fidelity account, but you can invest with a Self-Directed IRA account.

Q. What is the minimum term commitment on invested funds?

A. It is a $2,500 minimum investment with a 4 year lock up period.

Q. What percentage of your portfolio fails to perform, what are the typical costs to foreclose on a residence, and what is the average gain that you realize on the sale after foreclosure?

A. 60% non performing, 40% performing. Of that 60%, only 10% of those will go all of the way through the foreclosure process — for the other 90%, we can come to a resolution with the borrower.

 Q. With our economy declining and real estate investment seeming more risky, do you see a more lucrative chance for investing now?

A. Depends on which aspect of real estate you are investing in. For us we view this as a very good opportunity, as our performance is not tied to real estate prices.

Q. If I have $10,000 to invest, can I do 4 investments of $2,500 or is it better to invest $10,000 at one time? And if I do invest $2,500 over 4 investments, am I investing in the same or different notes?

A. For bonus share purposes, it is better to invest that amount at once in order to get the most out of the bonus shares, as each investment is seen as unique. As far as what your money is tied to, it is spread out so that you are not tied down to one specific asset.

Q. How long has this operation been in motion?

A. This fund is a Reg A+ offering that has 1 year to raise $75M, and we launched in July 2022.

Q. What states won’t you invest in?

A. We prefer to stay away from CA, NY, and NJ, but it really depends on each situation and each status of each loan.

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