Commercial Real Estate Income Funds
Commercial Real Estate Income funds are designed to reduce risk and maximize returns by investing in a diversified portfolio of real estate projects, hand selected by the fund’s management team for the best combination of security and profit potential. Some funds pay investors an annual interest rate of 8%, paid monthly, as well as a share in the fund’s profits which is paid quarterly.
Real Estate Income Funds focus on high-yield, 1st and 2nd position loans and in some cases will take a share of the developer’s profits. These loans are always secured by real estate or real estate-related assets. An experienced fund management team typically reviews dozens of deals before they decide to make an investment.
Properties can include multi-unit apartment buildings, mixed-use developments, hotels, medical buildings, shopping centers, office buildings, assisted living facilities or other kinds of commercial projects.
One of the benefits of lending against Real Estate is that the loan is secured against a physical asset. To maximize the security of each investment made, investors’ capital is pooled in a Fund and then invested in multiple projects, typically across different asset classes and geographies for maximum risk diversification.
Real Estate Income Funds lend money to borrowers who are willing to pay the interest rate the Fund charges because they need the money to complete a short-term project, such as renovation, repurposing or improving the property, which will enable the developer to sell the property for a higher price once the improvements are completed.