View this Zoom call for a deep dive into how the fund works. Among other things, we discussed:
– How you might think the fund works versus how it actually works
– How we’re preserving investor capital and generating non-correlated returns
– How our investors will (or will not) be affected by a recession
– Why sales (mostly) don’t matter
– The power of real estate notes
– The advantages of a debt fund and over an equity fund
– How high inflation and rising interest rates are (or are not) affecting us
Learn all about our origin story, the land business and Doug’s background by listening to this podcast episode on YouTube. It can also be found on iTunes and Spotify.
There have been several investor events, and more are coming up. View a video and pictures from some of our gatherings:
Video: Helicopter tours with ATVs, BBQ and skeet shooting
Pictures: Football game, wine tasting and party at a microbrewery
The SEC regulates private equity funds and has the right to investigate and prosecute any sponsors who represent returns as being “guaranteed.” There is a degree of risk associated with any investment, and it is up to each investor to assess that risk before investing.
Refer to the Private Placement Memorandum (PPM) for details. Start at page 18 of the PPM, which is page 24 of the PDF.
You are to form your own opinion, but we do not see a plausible way for our investors to lose their investment or fail to receive the projected returns. This is due to the fund’s structure and strict lending criteria. That structure involves the fund making quality loans that are secured by first liens.
Some of our investors are listed here. Names are excluded to maintain their privacy. It’s an impressive group, and we try to provide networking opportunities as much as we’re able.
Sales have been strong, and we’re positioned for another record-setting year. We give credit to both the sales team and a resilient business model.
If we have a weak sales month, it’s generally because we were a little short on inventory or because we were working to push projects along, not because there was a shortage of buyers.
You can view historical ranchette sales by going here. Refer to recent email updates for pictures and more.
The following paperwork is common and required each time we buy land or sell a ranchette. Many of these documents protect the fund’s position as a lender:
RMLO Package for a Ranchette Sale: This contains all information related to qualifying and approving a borrower. It is assembled by Texas Pride Lending in Dallas.
Title Package for a Ranchette Sale: This is the documentation that is presented and signed by all parties during the sale of a ranchette at a title company.
Sample Deed of Trust for a Loan Against Land: This document secures the fund’s loan with a first lien against the land. It is filed at the courthouse where the property is located.
Sample Promissory Note for a Loan Against Land: This document details the terms of the fund’s land loan.
Sample Collateral Transfer of Note and Lien: This document secures the fund’s loan with a first lien against a note. It is filed at the courthouse where the property is located.
Sample Promissory Note against a Land Note: This document details the terms of the fund’s loan against a note.
This was covered in the video but not the slide deck (PDF).
Investors are receiving $833.33 per month, which is $10,000 per year, on each $100,000 invested. Those who have chosen to automatically reinvest their monthly returns are benefiting from compounding over time. This helps raise their internal rate of return (IRR) to 10.47%.
An investment of $100,000 is projected to be worth $150,000 after 5 years if you choose to take your distributions and leave them in a checking account. That same investment is projected to be worth $164,531 after 5 years if you chose to have your returns automatically reinvested.
A $100,000 investment is projected to be worth $300,000 after 20 years if you take your distributions and leave them in a checking account. That increases substantially to $732,807 if you chose to have them automatically reinvested.
As you can see, reinvesting can lead to vastly improved outcomes over time. This is why Albert Einstein referred to it as the “miracle of compound interest.”
This is a Reg D Rule 506(c) offering and must comply with associated SEC requirements. As a result, investors must be accredited.
Per the SEC, an individual must meet one of the following two criteria to invest:
“Net worth over $1 million, excluding primary residence (individually or with spouse or partner).”
“Income over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years, and reasonably expects the same for the current year.”
Find more details on the SEC’s Accredited Investor page.