FAQs
FAQs
Is Prive Funding putting any “skin the game”?
Yes, as promoter and sponsor of the investment, Prive Funding will be making a cash investment and each Member of Prive Funding’s organization who functions as a co-Manager is also required to make a capital contribution to the project. The investors, themselves, will not incur any additional liability for the project.
What will Prive Funding do to protect the investment?
We will closely evaluate each acquisition for the potential to improve the value of the debt and increase stability of the cash flow. We will closely manage the property and the maintenance of the property to forestall problems with the real property itself and to maintain value. In addition, our understanding of the particular markets will allow us to maximize the opportunity to increase purchase intelligently and if need be take control of the asset if needed for liquidation.
Why should investors rely on our strategy for income protection and investment returns?
We thoroughly analyze our investments to accurately predict the cash flow stream during the period of the investment and the likely challenges that will result from our difficult economic times. By carefully selecting target debt acquisitions & evaluating the value of the underlying properties and purchasing them at favorable prices, we have a higher probability of achieving our investment goals.
How does the economy impact this strategy?
The turbulence in the economy affects some consumers more harshly than others. Accordingly, some real property owners/borrowers may be placed in a position of constrained income. These factors create irregularities and anomalies in the real estate market. However, these irregularities and anomalies create the favorable opportunities for us. We analyze the level of distress that the property or owner is suffering so that we may make investment decisions on real property that we think has high potential upside.
How will we get our money back when the investment is over?
The investors will receive their capital investment back plus any accumulated profits that have not previously been distributed, in approximately seven years, when we sell our properties.
If the deal doesn’t work out, what is the most likely reason that this would happen?
If the deal doesn’t work out, the most likely reason is that we did not achieve our target liquidation value on a majority of the assets, or the income projections were too low.
What is the hardest part of executing this strategy?
Our most difficult task is identifying when the asset can be liquidated with the highest return and the lowest risk. In particular, we must be able to identify the level of capital investment to restore and upgrade the real property to achieve the profits we seek.
Can we have our capital investment back before the investment is completed?
This should be considered a long term investment and investors should not go into this investment planning to ask for their capital back before the hold period has expired. However, we understand that unforeseen situations can occur making such requests necessary. To protect the United States securities exemption and the United States tax status for all of our investors, we must retain the unilateral right to deny or grant requests for early withdrawal from the investment. If we do allow an early withdrawal, the investor will receive a final payout. However, the payout amount will not include participation in the upside capital appreciation of our investments since the Fund will not make distributions of capital appreciation until such appreciation has actually been realized through the sale of the real property. A full description of the early withdrawal provision is described in the Operating Agreement.
What could go wrong?
Risk exists in all real estate investments and the strategy of we are intended to mitigate risk. The risks are thoroughly discussed in the full Private Placement Memorandum. However, some of those risks include: (1) Other competitors might follow the same strategy and bid up the price on desirable properties; (2) We might underestimate rehabilitation expenses. (3) We might be unable to resell the property at a high enough price to generate the expected profits; (4) We might encounter delays related to building permits and regulatory issues; (5) We might over-estimate deal flow; (6) We might be unable to find competent contractors to perform the rehabilitation; (7) We might encounter time delays in acquisition, rehabilitation and resale of the properties; (8) We might experience further deterioration of the economy that might negate the value added through rehabilitation;
Is Prive Funding putting any “skin the game”?
Yes, as promoter and sponsor of the investment, Prive Funding will be making a cash investment and each Member of Prive Funding’s organization who functions as a co-Manager is also required to make a capital contribution to the project. The investors, themselves, will not incur any additional liability for the project.
What will Prive Funding do to protect the investment?
We will closely evaluate each acquisition for the potential to improve the value of the debt and increase stability of the cash flow. We will closely manage the property and the maintenance of the property to forestall problems with the real property itself and to maintain value. In addition, our understanding of the particular markets will allow us to maximize the opportunity to increase purchase intelligently and if need be take control of the asset if needed for liquidation.
Why should investors rely on our strategy for income protection and investment returns?
We thoroughly analyze our investments to accurately predict the cash flow stream during the period of the investment and the likely challenges that will result from our difficult economic times. By carefully selecting target debt acquisitions & evaluating the value of the underlying properties and purchasing them at favorable prices, we have a higher probability of achieving our investment goals.
How does the economy impact this strategy?
The turbulence in the economy affects some consumers more harshly than others. Accordingly, some real property owners/borrowers may be placed in a position of constrained income. These factors create irregularities and anomalies in the real estate market. However, these irregularities and anomalies create the favorable opportunities for us. We analyze the level of distress that the property or owner is suffering so that we may make investment decisions on real property that we think has high potential upside.
How will we get our money back when the investment is over?
The investors will receive their capital investment back plus any accumulated profits that have not previously been distributed, in approximately seven years, when we sell our properties.
If the deal doesn’t work out, what is the most likely reason that this would happen?
If the deal doesn’t work out, the most likely reason is that we did not achieve our target liquidation value on a majority of the assets, or the income projections were too low.
What is the hardest part of executing this strategy?
Our most difficult task is identifying when the asset can be liquidated with the highest return and the lowest risk. In particular, we must be able to identify the level of capital investment to restore and upgrade the real property to achieve the profits we seek.
Can we have our capital investment back before the investment is completed?
This should be considered a long term investment and investors should not go into this investment planning to ask for their capital back before the hold period has expired. However, we understand that unforeseen situations can occur making such requests necessary. To protect the United States securities exemption and the United States tax status for all of our investors, we must retain the unilateral right to deny or grant requests for early withdrawal from the investment. If we do allow an early withdrawal, the investor will receive a final payout. However, the payout amount will not include participation in the upside capital appreciation of our investments since the Fund will not make distributions of capital appreciation until such appreciation has actually been realized through the sale of the real property. A full description of the early withdrawal provision is described in the Operating Agreement.
What could go wrong?
Risk exists in all real estate investments and the strategy of we are intended to mitigate risk. The risks are thoroughly discussed in the full Private Placement Memorandum. However, some of those risks include: (1) Other competitors might follow the same strategy and bid up the price on desirable properties; (2) We might underestimate rehabilitation expenses. (3) We might be unable to resell the property at a high enough price to generate the expected profits; (4) We might encounter delays related to building permits and regulatory issues; (5) We might over-estimate deal flow; (6) We might be unable to find competent contractors to perform the rehabilitation; (7) We might encounter time delays in acquisition, rehabilitation and resale of the properties; (8) We might experience further deterioration of the economy that might negate the value added through rehabilitation;
