Partnership Offering
What Makes Us Different
ADVANTAGE
BENEFIT
Fund only invests in loans that were originated by our Parent Private Money Lender, Tower Fund Capital and/or its affiliates
Since we only invest in loans originated by Tower Fund Capital, intimately familiar with the initial underwriting of the loan, borrower due diligence and strength of our loan documents
Fund’s loans are both business use loans and non-owner occupied
Foreclosure can be initiated as a Business Loan, rather than owner-occupied primary residence, which can expedite the foreclosure process
Fund’s loans are appraised by 3rd party licensed providers, and we only lend at or below 65% “as is” Loan to Value (“LTV”)
A correct value is established, which can allow for significant preservation of equity and larger profit margin
Enhanced Credit Guarantees by all borrowers, which include (i) Personal Guarantee, (ii) Confession of Judgement (in states where allowed), and (iii) Pledge of Equity in the Borrower Entity
(i) Personal Guarantee – Enables to pursue guarantor personally for any deficiency in our recovery.
(ii) Confession of Judgement – This enhancement allows us to enter a Judgment with the court against the Guarantor and to start collecting on all assets (i.e. including bank accounts held by guarantor)
(iii) Pledge of Equity in the Borrower Entity – This process allows us to conduct a Non-Judicial Foreclosure which can expedite the time which Lender can conduct an auction to foreclose on the shares in the Borrower Entity
Tower Fund Capital purchase an Option to sell all defaulted loans to Axy Wrap, a 3rd Party aggregator, and charges borrowers a .5% Fee at origination of the loan
In the event the loan goes into default, Tower Fund Capital will exercise the Option to sell the loan at the full unpaid loan balance, which allows us to recapture our full equity position. All of our loans have this enhancement and it allows us to pick and choose which loans to foreclose on
How It Works
legal entity
Investment Partner forms an SPV (Special Purpose Vehicle) entity. Investment Partner is a 100% owner of this entity.
asset purchase
Partners purchase 100% of the note in an Investment Partners SPV. Fund will provide 10% of equity and Investment Partner 90%.
npl management
Fund will manage the NPL to bring it to a successful completion either through borrower payoff, foreclosure or sale of the property.
transaction completion
Upon completion, no longer than 12 months since asset acquisition each partner will receive 15% Preferred Annual ROI on their investments. Additional profit will be divided 50/50 among partners.
example
-
Loan Amount $1,000,000.00
-
Partner(s) Contribution $1,000,000.00
-
Loan Default Rate 24.00%
-
1 Year Default Revenue $240,000.00
-
Partner(s) Preferred Rate 15%
-
Partner(s) Preferred Revenue $150,000.00
-
Loan Revenue After Partner(s) Payout $90,000.00
-
Partner(s) Profit Share Rate 50%
-
Partner(s) Profit Share Revenue $45,000.00
-
Partner Total Revenue $180,000.00
-
Partner Total Rate of Return 20.00%
| advantage | benefit |
|---|---|
| Partner(s) owns 100% of the loan | This gives a full control of Partner(s) investment |
| Fund participates in the loan with its own equity | Fund has skin in the game |
| 15% Preferred Return on Investment | Fund will not receive any payments until Partner(s) meet the 15% minimum threshold on their investment |
| Partner(s) owns 100% of the collateral |
Program Risks
Pros
- An enormous upside in collateralized real estate debt investment
- Risk score is low with high ROI
- Financial risks are minimal
Cons
- Timeline, which might be longer than anticipated
How To Join
Establish Equity Commitment
Establish an SPV
Sign Participation Agreement
Once the above steps are completed, the Fund will provide the deal flow and management within the first 30 days of signing a Participation Agreement
Team
OVER 100 YEARS OF COMBINED EXPERIENCE
