Investor FAQ

What does Dynamic Equity Partners want to see when they are qualifying an investor?

Dynamic Equity Partners requires a Personal Financial Statement.

What is the minimum investment that I can make?

$10,000 is the minimum required by Dynamic Equity Partners.

Can I add to my investment later if I so choose?

Dynamic Equity Partners permits and encourages current investors to add to their investment.

If I decide I want to be an investor, may I hand pick the projects that I invest my money into?

Dynamic Equity partners allows for investors to hand pick which projects to invest into under our Tier 2 Investment offering.

What are the different ways that I can participate in private mortgage investments, and what are the advantages/disadvantages of each?

There are two different approaches to participating in a private mortgage investment:

1) Investor may choose to participate with Dynamic Equity Partners, which is already staffed to take care of all the responsibilities on the loan by experienced professionals and benefit from the greater capital and income protection that inherently results from your funds being invested in carefully chosen mortgages.

2) We can submit viable loan opportunities for your consideration and you can select which loan(s) to invest in on your own and accept responsibility for all that it entails, including; conducting all necessary due diligence, structuring the terms and conditions of loan(s), hiring an experienced real estate Lender’s attorney for representation and documentation, and actively service the loan after closing.

Can I invest with my IRA?

Yes. There are many IRA custodians across the US that handle self-directed IRA’s and are familiar with this type of investment. You can utilize all forms of retirement plans including Keogh’s, Profit Sharing Plans, etc. Tax-deferred investors (IRA’s, Pension Plans, Keogh’s and the like) should speak with their financial advisor about any possible impact of UBTI (Unrelated Business Taxable Income).

What exactly are private mortgages? Why would I choose to invest in them?

A private mortgage is a secured debt obligation, which produces a regular, predictable income stream to the investor with all the security, protections and recourse that a mortgage lien can provide. Unlike stocks, the security is tangible bricks and mortar, where legal protections such as title insurance and many other unique rights and remedies ensure the enforceability of a mortgage lien. Many private mortgage loans are also secured by personal guarantees from the Borrowers, adding another layer of recourse beneficial to the investor.

How often will I receive interest payments?

Dynamic Equity Partners makes monthly distributions of interest to its investors.

Do private mortgage investments belong in my portfolio?

Whether private mortgage investments are right for you will depend upon your time frame, your risk/reward expectations and your anticipated need for liquidity.

Furthermore, private mortgages have stable returns and fit well within a portfolio of stocks, bonds and real estate. Adding these to a portfolio will make the returns of the total portfolio more consistent. When evaluating any potential investment, the advice of a professional investment advisor is helpful in assessing the role of private mortgages in an otherwise liquid investment portfolio.

Is it possible to achieve diversification with this type of investment?

Diversification is one of the primary advantages of investing within Dynamic Equity Partners. Our goal is to have a widely diversified portfolio of private mortgage investments in order to reduce risk as well as to achieve continuity of cash flow (in other words, even if one mortgage is repaid, there are still many other mortgages paying the desired rate of return, resulting in continuous cash flow).

How liquid is my investment and what time commitment do I have to make?

Since most of our bridge loans have terms from 6 months to 5 years there is great flexibility. However, once you have committed to fund a mortgage you should be prepared to hold that mortgage for the entire term. If you need liquidity sooner than expect then you may certainly choose to sell the mortgage note to another private investor (which we can arrange at no cost to you) but expect to sell the mortgage note at a discount.

How safe are private mortgage investments and what are some of the risks?

There are inherent protections unique to mortgage lending which can significantly limit any downside risk when carefully implemented in the deal’s structure and in the mortgage documents. The biggest possible risk, of course, is that for one reason or another the Borrower stops paying the mortgage and at the same time the value of the collateral diminishes. Although we have not seen this occur in 8 years of originating, managing and servicing such mortgages, it is theoretically a risk.

To offset this risk factor, in most cases there will also be one or more personal guarantees. In situations, for example, where a property is being rehabilitated, an interest reserve may be established to fund the interest payments during the time that the property is being renovated and not producing any cash flow. The key is choosing the loans and the Borrowers very carefully and then anticipating (and incorporating into the loan documents) ways to offset the risk of a non-performing loan.

Keep in mind that the mortgage documents assess late fees and default rates of interest that serve as powerful disincentives for Borrowers to make any late payments or to default on their loan obligations. If, however, the deal has been structured properly, there will be plenty of equity in the property to protect the Lender.

As in any investment opportunity, the quality of the management is of key importance. You want seasoned professionals in charge who have many years of experience successfully originating and managing a portfolio of private mortgages. Next, you need to be sure that the Managers are also investing their own personal funds, side by side with the other investors. The Managers of Dynamic Equity Partners have made a substantial investment of their personal funds on the same terms as the other investors.