7% Preferred Return – plus On-Demand Access to your Capital
You may have heard that PPR’s Reliant Liquidity Fund is our latest offering that features many of the same benefits as our previous fund offerings over the past decade, such as monthly ACH payments and backing by a diverse pool of assets, primarily 1st-position mortgages.
What’s different about the Reliant Liquidity Fund is that you may request return of your invested capital at any time. In other words, there’s no minimum term. That’s what we mean by “on demand” access to your capital.
Have we piqued your interest? Read on to discover more about the Reliant Liquidity Fund…
Key Advantages of the Reliant Liquidity Fund
- Liquidity. Unlike most real-estate-backed funds, the Reliant Liquidity Fund doesn’t lock up your capital for 3-5 years. You can request return of your invested capital anytime. No more fear of missing out on opportunities because your funds are tied up in a longer-term fund. And no more worries that you can’t access your capital if an unexpected need arises.
- Returns that outpace inflation – and that far exceed the returns of low-yield accounts like Money Markets. The Reliant Liquidity Fund currently offers a preferred return of 7%, significantly better that what’s available in a Money Market-type fund, the yields on which which may not even stay ahead of the rate of inflation.
- No brokerage fees. Even self-managed stock index funds have fees that eat into your returns, and brokers traditionally earn their living entirely from fees they charge investors. Not so with the Reliant Liquidity Fund, where there are zero brokerage or transaction fees.
- Asset-backed investment. The mortgages owned by a note fund like Reliant are backed by the real estate securing the loans. Contrast this to stock certificates, which can plummet in value since that value is based more on market psychology than on tangible assets.
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- Passive investment, i.e. “mailbox money.” Participating in a note fund like the Reliant Liquidity Fund requires zero work on the part of the investor. The fund’s operations team handles the work of managing the assets (mortgages) via highly developed systems and staff. Compare the passivity of fund investing to owning real estate, with the well-known “tenants, toilets and termites” responsibilities – or even to owning individual notes.
- Scalability. Keep your money working for you. No inventory to invest in? No deals that make sense? No problem. You don’t have to wait for a great performing note or investment property to come along to get your capital working for you. The minimum investment in the Reliant Liquidity Fund is only $50,000, so there’s no need to have your money sitting idle.
- Limited liability. Landlords are on the hook for “slip and fall” and other lawsuits. Note fund investors are shielded from such liabilities by the nature of the investment.
- Privacy/Anonymity. When investing in a note fund, i.e. a “private placement,” your personal name isn’t made public, unlike when owning real estate.
- Professional management and experience. When you invest in a fund like the Reliant Liquidity Fund, managed by PPR, you get the benefit of a ten-year track record of fund management performance. We specialize in acquisitions, workouts, and portfolio management. You don’t need experience managing notes or real estate yourself.
- Tax advantages. Your returns from note fund investing are taxed at a lower rate than earned income because they aren’t subject to the taxes that go along with earned income (FICA, social security, etc). You may also invest using tax-advantaged funds from IRAs or other qualified accounts.
- Your money is working, not you. With fund investing, your capital is doing the “work,” so none of your time or effort is required to earn a return. Contrast this to earned income or even profits from a business you own but must work in.
- Flexibility of Funding. Investment in the Reliant Liquidity Fund may come from cash as well as retirement accounts such as IRAs, keeping in mind the $50,000 minimum / $1,000,000 maximum per EIN/funding source.
How about Investing in the Reliant Liquidity Fund vs. DE IV or Similar Note Funds?
- No Set Term. DE IV has a three-year term. The Reliant Liquidity Fund has no set term since you may request return of your capital at any time.
- Rate. The Preferred Return for the Reliant Liquidity Fund is currently 7%, as opposed to 10% for DE IV.
- Same Operations. Otherwise, the two funds operate similarly in the way they acquire and manage assets, and the same fund management team operates both funds.
How about Investing in the Reliant Liquidity Fund vs. Hard Money Lending?
- Elimination of “gaps” in earning a return on invested capital. Hard money lending certainly can be profitable, but it typically means that your capital is moving into and out of specific investments every 3-9 months. On the positive side, your capital isn’t tied up for long periods of time (unless the borrower defaults and you’re left to deal with the property). On the negative side, your capital is likely sitting idle between deals, earning nothing. With the Reliant Liquidity Fund, your capital earns a return as long as you choose to keep it invested.
- Simpler Due Diligence. With hard money lending, due diligence is required on the property and/or borrower prior to every deal. With note fund investing, apart from getting comfortable with the fund manager and fund’s business model, no due diligence is needed.
- Scalability. As a hard money lender, you could (and will, eventually) have difficulty finding appropriate deals to fund. With the Reliant Liquidity Fund, as you have additional capital to deploy, you can simply add it to your original investment, keeping in mind the $50,000 minimum and $1,000,000 maximum deployment per EIN or entity.
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How about Investing in the Reliant Liquidity Fund vs. Investing in Performing Notes?
- Diversification. Investing in a note fund means that you’re investing in multiple notes (and also multiple real estate markets), thereby spreading the risk among all the assets owned by the fund.
- Buying Power. By pooling money together, fund participants purchase mortgages in bulk, which in effect gives the group access to wholesale pricing.
- Sourcing. Fund managers have sources of assets that the individual investor doesn’t have. Many major sources of assets like banks and servicers sell loans only in large packages and only to carefully vetted buyers.
- Simplified Due Diligence. Besides reviewing the management team and underlying business model of the note fund you’re investing with, you wouldn’t need to know how to perform due diligence on each loan purchased by the fund, and you wouldn’t need to pay for any of the services that process entails.
- Scalability. Note funds tend to be well-equipped to grow in response to changing market conditions, and their professional staffs and proprietary software and other systems allow them to scale more easily than an individual investor could. For example, if the opportunity to purchase a large pool of mortgages became available, a note fund managed by PPR has the resources to move on the trade, whereas an individual investor would likely find it challenging to do so. More importantly, as you, the investor, scale in terms of capital deployment, with a fund there’s no bottleneck with finding suitable assets to purchase.
- Decreased liability. Note owners are increasingly subject to stringent compliance requirements on the federal and state levels. In a note fund, your liability is strictly financial and is limited to the capital you have deployed in the fund. There’s no need to worry about the kinds of personal liability that note owners face in the current regulatory environment.