Savvy investors are looking for three things in the marketplace – Yield, Security and Safety. Red Oak has designed its Fund to deliver all three….
How can I expect a strong, steady return on my investment? Red Oak invests in the performing Mortgage Notes of income-producing commercial real estate properties – not the real estate itself! This allows for a pre-determined fixed rate of interest return for the Fund. All Notes are issued on a short-term basis, allowing for greater flexibility for the Fund, as well as the commercial borrowers. When a Note is issued at 12% interest rate, then we know that the return will be 12% – and no less….
Points and fees paid by the Borrower insure that all expenses are covered upfront, and each Note has a protective rollover feature which preserves the yield to the Fund – even in the event of extensions. This allows us to provide consistent high returns to Fund investors!
Is my investment secured? Yes! Each Note owned by the Red Oak Capital Fund is secured by quality income-producing commercial real estate, at a low loan-to-value. Our underwriting process and constant monitoring and onsite inspection process insures that your investment is collateralized by strong real estate assets that are meeting or exceeding financial expectations.
Unlike stocks, bonds, or other business investments which can literally decline to a zero value, real estate always has – and always will – have a calculable base value.
Unlike a REIT (Real Estate Investment Trust), where you are exposed to possible headaches associated with property management, operational costs, and all the problems of running a commercial property – we are only invested in the underlying Note. That’s a much more secure position for our investors!
Is this a safe investment? While all investments come with some degree of risk, we have limited it in a number of ways…
First, again we are only investing in the Note itself – not the real estate. This protects us from runaway property expenses and loses from the operation.
Second, for each commercial Note, we limit the LTV ratio to make sure that their is sufficient equity in the property based upon the risk and property type.
Third, we require reserves to be set up to cover payments! This protects against defaults, and makes sure that returns are maintained.
Fourth, we monitor and audit the financial performance of every property. This alerts us to potential problems before they become big issues.
Fifth, we assist each Borrower with a exit strategy. This enables them to refinance or sell the property in a timely fashion to make sure that each Note is paid promptly.
These are just a few of the ways that we are protecting our investors, and their money. We treat each investor as if they were part of our family – because you are!
Become a member of the Red Oak family today!