refern design & real estate
INVEST IN REAL ESTATE
Let your money work for you! Our focus is to provide value for our investors by offering them fixed rates of return from an industry with tangible assets. We market heavily to find distressed sellers and homes, putting them back to use in the communities and earning great returns for our investors with minimal risk.
FINANCING MODELS
re:fern uses two financing models for our fix-and-flip properties to cover the purchase price, renovation, and closing and carrying costs.
Graphs below are shown as a percentage of the property's after repair value (ARV).
Financing Model #1
100% of the project costs are funded by a private investor or pool of private investors.
Financing Model #2
A majority of the project costs are funded through a Hard Money Loan (HML) that is tied to the asset and based on a loan-to-value ratio. Remaining project costs are funded via a private investor.
INVESTMENT OPTIONS
There are small and large investment options available for every type of investor, no matter the financing model for a project. Once we've determined the investment amount, there are a number of options for private investors to select to suit their financial needs.
DEBT VS EQUITY
At this time, we only offer opportunity for debt loans, meaning, we borrow capital from the lender to be repaid at the end of the term. We currently do not offer equity in the business or project profits.
UNSECURED LOAN
Typical for gap funding or smaller loans and is not tied to a hard asset (the property). It offers more flexibility in the utilization of funds, such as renovation costs or holding costs.
SECURED LOANS
Typical for full project funding based on a loan-to-value ratio. It is tied to a hard asset (the property). Lenders receive a promissory note with security attached to it. (i.e. mortgage or deed of trust)
INTEREST
Interest is a fixed rate on the loan amount over the course of the term, typically between 8-12%.
POINTS
Option to add points (1pt = 1% of loan value), to be paid upfront to the lender at the start of project.
TERM LENGTH
Typically averages about six months for fix-and-flip projects, however, lender can choose to re-invest in another on-going project at the end of the term.
ANNUALIZED
Interest is annualized, but can be considered for a straight interest payment regardless of term length depending on the negotiated interest rate.
PAYMENTS
Interest is accrued and paid at the time of resale as a balloon payment (preferred) or distributed monthly.
Interest Earnings
Private Investments
Based on the investment amount and negotiated terms, the return on investment (ROI) can range. Investments can start as little as 20K. An investment example is illustrated to the right.
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See your returns in as little as 6 months or re-invest for a longer-term ROI.
Example
Investment Terms
Annualized interest + points.
Paid as a balloon payment after resale.
6 month project.
OPPORTUNITIES AHEAD
FROM HOUSE TO HOTEL
Within five years, the home acquisitions will be scaled and expand to different markets. As it grows, the intent is to hold more properties as long-term rentals (LTR) or mid-term rentals (MTR) in order to increase passive income and cash flow. By year five, the goal is to acquire, design and operate a boutique hotel with 10-20 rooms. As a result of the anticipated expansion, there is opportunity for investors to be part of a larger profit stream.