Frequently Asked Questions
Secured Real Estate Income Strategies, LLC normally lends money to established, pre-qualified and experienced property developers who use the funds to build, improve and add value to a diverse range of US residential and commercial properties with a mix of new developments and rehab projects. The loans are usually secured by first and/or second position liens on physical real estate.
It means that the Company has priority over most other liens or claims on the property if the borrower defaults by not making interest or principal payments on time. This first lien position is confirmed by legal documentation and is registered in the land records where the property is located until the loan is paid off.
Why do borrowers need a short term loan and why are they willing to pay a high interest rate when general interest rates are so low?
Many commercial borrowers cannot qualify for a loan at a traditional bank these days because lending standards have become so stringent. It can be even more difficult for them to qualify if they are self-employed, or if the commercial property is not owner-occupied. Secured Real Estate Income Strategies, LLC (the ‘Company’) can make loans to qualifying borrowers who are willing to pay the interest rate the Company charges because they need the money to complete a short-term project, such as renovating or improving the property, which can result in a higher valuation once the improvements are completed. The process of arranging a loan from the Company is normally much quicker and easier than getting a traditional bank loan, which can involve extensive and time-consuming documentation and in many cases leads to a rejection of the loan application.
The managers of Secured Real Estate Income Strategies, LLC (the ‘Company’) have many years of combined real estate transaction experience across multiple real estate sectors. In addition, they employ underwriting processes that have been honed by many years’ experience, and will usually only work with trusted borrowers who have a demonstrable track record and the capacity to ensure that projects are delivered on time and within budget. The job of the managers of the Company is to carefully review the details of every property. The borrower’s finances will be analyzed. Each property is normally appraised by certified appraisers or local commercial real estate brokers with specific knowledge of the value of these types of properties where they are located and title insurance is usually obtained.
Investments will usually be secured by short term (i.e 24 months or less) first and/or second position loans secured by real estate. The Managers of Secured Real Estate Income Strategies, LLC (the ‘Company’) have control of the funds that are paid to the Borrower and as part of the construction drawdown process only release these funds once the works associated with the drawdown request have been checked and approved. Borrowers normally have to put their own money or collateral into their project so they have an interest in the success of the project. For further information on how the Company is managed, please refer to the Company’s Offering Circular.
The Company’s management team have navigated real estate downturns before and are well positioned to know how to deal with them if they were to happen again. The Company normally issues loans to a maximum loan to value which will be typically 70% of the completed value – this provides a cushion in case of a real estate market downturn. The Company also only lends its capital on a short term basis, typically 18-24 months, thereby reducing the Company’s exposure to any long term downturn risk.
Yes – you can roll over your investment funds from a 401k or IRA at another custodian into a self- directed retirement account that can invest in alternative assets such as Secured Real Estate Income Strategies, LLC (the ‘Company’). The rollover process is usually straightforward and the money is transferred to the self-directed IRA account and then invested into the Company. When handled properly, these rollovers are tax-deferred or tax-free.
Investing in real estate has risks, and isn’t guaranteed, which is why you need to understand the strategy and the people behind the fund so you can make the right investment decisions for yourself. The main benefit of investing in Secured Real Estate Income Strategies, LLC (the ‘Company’) is that you could earn a reliable stream of monthly income together with a share of the profits that the Company makes, and your investment will be secured by first and/or second position mortgages on physical real estate. The Managers of the Company have many years’ real estate investing experience and this helps ensure that the Company invests in viable real estate investment opportunities which underpin the Company’s interest distributions, profit share and return of capital. For more information please refer to the Company’s Offering Circular.
Properties can include multi-unit apartment buildings, mixed-use developments, hotels, medical buildings, shopping centers, office buildings, assisted living facilities and other kinds of commercial projects. The Company may also lend against single-family homes operated as investment properties (not occupied by the owners) and owned by a corporation or limited liability company.
Secured Real Estate Income Strategies, LLC (the ‘Company’) is proposing to pay a targeted preferred return that is higher than the returns you would get from normal bank deposits. The preferred return will normally be paid to investors in equal monthly instalments. In addition, investors may benefit from a share in the profits that the Company makes, and these returns can be in addition to the interest rate. For more information please refer to the Company’s Offering Circular.
Secured Real Estate Income Strategies, LLC (the ‘Company’) offers the ability of reinvesting your monthly interest payments as well as your quarterly profit share, which will normally compound your return. This can make a positive difference to the overall return that you make. For more information please refer to the Company’s Offering Circular.
An investment in the shares of Secured Real Estate Income Strategies, LLC (SREIS) involves significant risks and you may lose all or part of your investment. Each investor should carefully consider the risk factors discussed in the Offering Circular before purchasing shares in SREIS. Some statements in the Offering Circular may contain forward-looking statements and are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements. Shares in SREIS are not publicly traded, are subject to holding period requirements, and are intended for investors who do not need a liquid investment. Investors should conduct their own due diligence, not rely on the financial assumptions or estimates displayed in this website, and are encouraged to consult with a financial advisor, attorney, accountant, and any other professional that can help you to understand and assess the risks associated with any investment opportunity. For further information on the risks associated with this investment, please refer to the Offering Circular.
Investors’ capital is pooled by Secured Real Estate Income Strategies, LLC (the ‘Company’) and then invested in multiple projects across different asset classes and different geographies for risk diversification. This helps protect your investment. For further information on the risks associated with this investment, please refer to the Company’s Offering Circular.
Secured Real Estate Income Strategies, LLC is managed by an independent fund management company which takes care of the monthly preferred return payments and any profit share distributions. For further information on the payment of interest and the risks associated with this investment, please refer to the Company’s Offering Circular.
The Company’s Managers maintain insurance coverage on all of its properties to cover such disasters.
The Company’s Investment Manager underwrites each deal carefully and individually according to strict underwriting criteria.
Investors in Secured Real Estate Income Strategies, LLC can be accredited or non-accredited. Accredited means that the investor’s net worth is at least $1 million excluding the value of their primary residence or they must earn $200,000 a year as an individual or $300,000 a year as a married couple. For details regarding the qualification of accredited and non-accredited investors, please refer to the Company’s Offering Circular.
The minimum hold period is 12 months. After this period, you will be able to request that your principal be returned by giving the Company notice, and you will be subject to the terms of the Company’s Redemption policies. You can also leave your principal in the Company for as long as you wish. If you leave your principal in the Company, it will normally continue to earn interest and any profit share. For more information on the Company’s Share Redemption policies, please refer to the Company’s Offering Circular.
Secured Real Estate Income Strategies, LLC (the ‘Company’) is managed by the Company’s Investment Manager. The Company’s Manager has the sole and exclusive right to manage, control and conduct the affairs of the Company including, but not limited to, the distribution of funds to investors, lending decisions, operational decisions and reporting activities. For more information on the fund manager, please refer to the Offering Circular.