The Opportunity: Through the purchase of notes issued by this Pre-Origination Note Fund, LLC (PONF), Investors can now invest in a line of credit used to pre-fund first-position mortgages originated by Sharestates. The line of credit that PONF issues is used by Sharestates to originate loans prior to syndicating them on the online platform or selling to institutional whole loan buyers. Investors now have the opportunity to gain exposure to a pool of loans that are held on the line for a short duration prior to being sold.
Benefits of investing in High Yield Credit Fund
A single investment wlll be spread across multiple loans via a line of credit used to pre-fund loans originated by Sharestates, increasing your diversification to projects, borrowers and geographies.
Each note has a fixed maturity date, allowing investors to have greater certainty related to principal repayment.
You’ll have access to pre-funding and construction draw exposure which is typically repaid within a short time frame.
You will not need to select individual investments. You will receive a fixed return with monthly interest payments.
Your investment will be fully-utilized, ensuring your investment dollars are earning interest from the day your funds clear escow.
Investors participating in the PONF are investing in a line of credit used to fund first-lien mortgages originated by Sharestates. Once these loans are originated, Sharestates will sell these loans either to its institutional or retail capital channels. The funds used from the PONF to originate the loan will then be returned to the fund to repeat the process.
Your investment is backed by the mortgages themselves.
Sharestates’ diverse blend of capital partners has enabled the origination of over $3.5B in total loan volume. Based on historical averages, loans are sold to investors in 2-4 weeks.
Investors may choose to invest in the fund for a 6, 9, or 12 month term at different rates of return (subject to change during ongoing offerings):
- 6-month term: 8%
- 9-month term: 9.5%
- 12-month term: 11%
The Rate of return issued for each Note is dependent on Market Rates achievable by Sharestates when originating loans on an ongoing basis, coupled with the duration of the note picked by the investor. Sharestates may adjust marketed rates for new issuances on an ongoing basis depending on market demand and fluctuations. When issued, each note will have a fixed rate of return and duration. While rates are not guaranteed, they are backed by underlying collateral (Mortgages) which are also covered by Personal Guarantees provided by the underlying borrowers.
Investors will receive interest monthly, and a return of principal once their investment term of 6, 9, or 12 months is complete.
You can invest in the real estate fund through Sharestates investment page: https://apps.sharestates.com/investments/
No, there are no fees associated with the real estate fund.
This is an illiquid investment without the option to withdraw funds prior to the term. Since this is a pre-origination fund being used to close loans, Sharestates needs to have a clear idea of the monies in the fund for cash management purposes. As you approach the maturity of your term, Sharestates will manage redemptions to meet targeted terms.
Yes, international investors may participate in this fund. International investors will need to complete a W-8BEN or W-8BEN-E as well as provide an unexpired copy of their government ID. These items can be uploaded for Sharestates review when an investor registers at https://www.sharestates.com/get-started/.
Yes! Investors will receive notifications when their investment in the PONF is nearing maturity. Investors may then redeploy those funds back into the fund or other Sharestates investment offerings, subject to availability.
Historically, real estate has outperformed the stock market. That’s why it is considered one of the best alternative asset classes. Real estate investing is not liquid, however, and it does carry some risks, but overall, it has been a good investment for private investors who perform the proper due diligence. We recommend always speaking with your investment advisor about any investment.
Sharestates has originated over $3.5B since 2015. Sharestates’ founders bring decades’ worth of knowledge from the real estate space, with a trove of experience found across our executive team. The key to this has been building strong relationships with borrowers and brokers to originate loans as well as a broad range of investors. These investors range from accredited investors and small hedge funds or family offices who invest through our retail channel, to large institutions who deploy $100M+ annually. Sharestates uses multiple warehouse credit lines to pre-fund loans before eventually selling them to one of our investor channels. The PONF is a new way to pre-fund loans while offering investors a new product that offers shorter investment terms and diversity.
- One way to achieve this status is to make more than $200,000 as an individual, or $300,000 as a married couple. Accredited investors need to have reached this income level in both of the last two years. They also need reason to believe they will cross that threshold in the current year.
- The other way is to prove a net worth of more than $1 million, alone or as a couple. The Securities and Exchange Commission excludes the value of the investor’s primary home, meaning it counts neither the equity in the property nor most mortgage liability. The regulator also states that a couple need not hold all its combined wealth jointly.
- The final way to achieve Accredited Investor status is through professional designations and certifications. To verify your status this way, you will need to provide proof of FINRA Series 7, 65, or 82 licensing, or that you are a knowledgeable employee (executive officer, director, partner, manager, etc.) at a private fund issuer of securities.