Secured Income Fund I
Secured Asset-backed debt investments
The Brenance Secured Income Fund I is a Reg D 506 (c) private placement evergreen fund with a core investment strategy to earn stable interest returns by lending money to qualified real estate investors for the purpose of acquisition, improvement, construction, or bridge financing of non-owner-occupied business purpose single-family, multi-family, or commercial real estate assets. All notes have short-term maturities of 12-24 months and are directly secured by the real estate assets themselves as collateral.
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Investment Amount
$100,000
minimum
Holding Period
18-month
minimum
Target Return
8-11% ARR
Distributions
Quarterly
(reinvest option available)
There is no guarantee that any performance projections will be realized. All investments involve risk, including the risk of complete capital loss. Please see the Offering Memorandum for a more complete discussion of risks and expectations for this opportunity.
Who can invest?
The investment offering is limited to "Accredited Investors" only. (As defined by in Rule 501 of Regulation D under the Securities Act of 1933).
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Suitability Requirements
Not all investments are suitable simply because an investor qualifies or is willing to invest. We take additional steps to learn about each investor’s goals, time horizon, liquidity requirements, and risk tolerance. This allows us to ensure our investment offering is suitable and aligns with the objectives of each investor.
Investor Questionnaire
All prospective investor(s) must read, and complete our “investor questionnaire”, which allows us to assess the investor's goals, risk tolerance, and qualification through their own disclosure. The questionnaire is part of the last section of the subscription document. Using the investor portal through our fund administrator’s website, investor(s) will be required to verify their accredited investor status and complete the “investor questionnaire” webform to finish the account setup process.
Income & Asset Verification
Each investor(s) “accredited investor” status must be verified internally to qualify for participation in the investment offering. Once a prospective investor creates an account through the secured investor portal on our website, the investor will be asked to complete a few questions and upload various financial documents to complete the verification (last 2 years' tax returns or personal financial statement). Once the financials have been reviewed and verified, the investor will receive an e-mail notifying them of their “accredited” status approval along with additional instructions to complete the initial investment process.
The Investment
Short-term higher-interest loans to qualified real estate investors for the acquisition, rehab, or construction of single-family, multi-family, or commercial real estate assets.
Offering Objective
The Brenance Secured Income Fund I (“The Fund”) core investment strategy is earning note rate returns by lending money to qualified real estate investors for the purpose of acquisition, improvement, construction, or bridge financing of non-owner-occupied business purpose single-family, multi-family, or commercial real estate assets. All notes have short maturities of 12-24 months and are directly secured by the real estate assets themselves as collateral.
Investment Cycle
Fund investment capital is deployed securely into asset-backed loans used by qualified real estate investors as short-term leverage. Once a loan has been made, the loan servicer will begin collecting monthly interest payments from the borrower, which then flow back into the fund trust account. Throughout the term of the loan, the borrower will complete the improvements to the property, and eventually list the property for sale or refinance the loan. Once the property sells or the refinance is completed, the principal balance of the loan will be collected from the closing title company and wired back to the fund trust account.
Private Placement Memorandum (PPM)
A comprehensive description of this investment offering can be found by reviewing the securities disclosure document, Secured Income Fund I Private Placement Memorandum (PPM). Investors should only make informed decisions by first reviewing all necessary disclosures regarding risks, strategies, the management team, investment criteria, and additional information about the issuer’s securities offering prior to investment.
Why Invest?
Fund investments can earn between 8-11% annually. Investment capital is deployed to experienced real estate investors as short-term loans secured by the real estate assets as collateral.
Passive Income Stream
Fund investments can earn between 8-11% annually. Accrued interest returns can be distributed quarterly as income or investors may elect to reinvest earnings and increase their investment basis to compound the earning potential of their initial investment over time. All reporting, statements, interest income and distribution payments are managed by the fund administrator.
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Secured Investment
Investment capital received by the fund will be deployed into numerous approved loans to earn interest. The typical maturity of these loans will be between 12-24 months, but from our experience, most loans will pay off 25-50% earlier than the contracted term of the loan. Monthly loan interest payments will be collected from the borrower by our contracted 3rd party loan servicer, then wired to the fund trust account. Once a loan is paid back in full through a sale or refinance of the asset, the principal loan proceeds are then wired back to the fund trust account from the closing Title Company. The process will then repeat itself and principal funds will be redeployed to fund new loans. The fund manager will seek to maintain a low balance of idle non-interest-bearing funds and maximize capital deployment into interest-bearing loans. The fund may choose from time to time to purchase additional qualified interest-bearing notes from approved partners. Note purchases may only be completed with approved partners and must fall within our underwriting risk profile. This will allow the fund to minimize idle capital, maximize earning potential, while still mitigating risk and preserving principal.
Risk Mitigation
When a loan is made, it’s secured by a recorded Deed of Trust. This instrument is officially recorded with the county and gives the lender the right to take the property back through foreclosure if the borrower fails to meet the agreed-upon terms in the Promissory Note. All recorded deeds follow a priority on title, loans made from the Brenance Secured Income Fund I require senior 1st trust deed position. Prior to the loan closing, any existing debt on title must be fully paid or subordinated, and a sufficient title insurance policy acquired to protect against any unrecorded liens, should any exist. This provides a great amount of security in the event the borrower fails to meet their obligations or is unable to pay the loan back.
Collateral
Structuring each loan with sufficient collateral and preserving adequate equity in the asset is the most secure approach to mitigating lending risk. If a loan default were to occur, the equity preserved within the collateral should provide enough security for the lenders asset manager to recover the principal balance of the loan plus any note rate or default interest due.
What about risks affecting the value of the collateral?
Initially, we determine the factors that produce the most adverse impact on our first priority, the preservation of principle. However, even with sufficient collateral initially, it’s important to critically assess how its value could change over the one-to-two-year term of the loan. Factors such as shifting market demand, budget overruns, project delays, or systemic circumstances such as recessions can all increase investment risk. While one cannot control all these forces, we strive to limit our exposure through careful evaluation of the borrowers’ experience, market, asset type securing the loan, and degree of leverage offered to the borrower during current market conditions.
* A fully detailed description on our approach and additional steps taken to mitigate risks can be found by reviewing our real estate debt “Investment Thesis” in further detail.
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What about risks affecting the value of the collateral?
Initially, we determine the factors that produce the most adverse impact on our first priority, the preservation of principle. However, even with sufficient collateral initially, it’s important to critically assess how its value could change over the one-to-two-year term of the loan. Factors such as shifting market demand, budget overruns, project delays, or systemic circumstances such as recessions can all increase investment risk. While one cannot control all these forces, we strive to limit our exposure through careful evaluation of the borrowers’ experience, market, asset type securing the loan, and degree of leverage offered to the borrower during current market conditions.
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* A fully detailed description on our approach and additional steps taken to mitigate risks can be found by reviewing our real estate debt “Investment Thesis” in further detail.
Subscription Agreement
Once you have reviewed the offering described within the Private Placement Memorandum and you’re ready to move forward with your investment, you’ll need to review and sign the Subscription Agreement. This is the formal agreement between the company and the investor to buy shares of the company at the agreed-upon price. This agreement will include all details regarding the offering, shares being sold, price per share, confidentiality agreements, and clauses.
Transfer of Funds
After completing the subscription agreement within your investor portal, a capital call e-mail will be sent to you requesting the committed funds be wired to the Fund trust account. Wire instructions will be provided to you within the investor portal. For additional security, before wiring, please call the Fund Manager directly to verbally verify the wire instructions.
Fund Administration
Congratulations! Your wire confirmation was received, now what? Our 3rd party fund administrator Verivest will reach out to you directly to complete the investor onboarding process. They will act as an extension to our back office and provide you with fund account setup, access, and reporting. Investor interest payments will be processed through the Fund Administrator each quarter and you will be able to set up direct ACH or physical check payments. Once onboarded you will also have visibility access to our active loan tape, the corresponding collateral securing each loan, origination & maturity dates, budget figures, and leverage ratios.