Why Accredited Investors Should Consider Short-Term Real Estate Loans

If you are an accredited investor looking into diversifying your portfolio, chances are that you’ve heard of short-term real estate loans. They are a kind of investment that merges the security of real estate with the flexibility of a short-term commitment. And unlike traditional long-term real estate investments, short-term real estate loans can often provide quicker returns without requiring years of waiting. But are they right for you?

What Are Short-Term Real Estate Loans?

Before getting into the weeds about why, let’s define what. Short-term real estate loans are a type of loan that generally lasts from six months to three years and is collateralized with real estate assets. Such loans generally bridge the financing of some sort of transaction in real estate-be it a fix-and-flip project, a bridge financing, or a property development-that doesn’t require long-term financing.

More often than not, this loan would be collateralized by an asset, such as a property serving as collateral. Real estate serving as collateral for borrowers means there is some level of security, which lessens the risk for investors as a form of repayment through liquidation in case of a borrower’s failure to repay a loan.

These loans are selected and professionally managed with LBC Capital Income Fund, LLC Income Fund to meet our investors’ needs. With a strong focus on risk reduction combined with stable return delivery, these investments are an extremely attractive option for those investors trying to diversify their portfolios from the volatility of the equities markets or the headache and time commitment of traditional real estate investing.

Why Accredited Investors Should Consider Short-Term Real Estate Loans

1. Higher Returns Compared to Traditional Investments
   One of the major reasons investors head to short-term real estate loans is the possibility of receiving higher returns. Because these loans often deal with real estate that is being purchased, renovated, and then sold or quickly refinanced, the rates of return can be much higher than any traditional bond or savings account. In this case, for accredited investors, there is potential for an increase in returns without assuming the risks of stocks or the headache and risks associated with long-term property management.

LBC Capital Income Fund, LLC aims to provide annual returns in a steady manner from 8-10% per annum, balancing attractive income with the management of risk. This is a big plus, especially for investors gunning for returns that not only outpace inflation but make a material difference in building wealth over time.

2. Predictable Income Streams
   Short-term loans related to real estate can provide that steady, predictable income that’s increasingly hard to find in today’s market. When one normally invests in a loan backed by real estate, he or she is given regular interest payments. Those payments are far more consistent compared to dividends from stocks. This can certainly be useful passive income for the accredited investor who wants passive income and doesn’t need to continually monitor the stock market.

If the unpredictable market swings are getting on your nerves and you are looking for more predictable income streams, such real estate loans are great additions to an investment portfolio. LBC Capital Income Fund, LLC structures such loans so that the investor receives consistent payouts to achieve their financial goals with peace of mind.

3. Diversification Away From Stock Market Volatility
   Let’s be realistic: The stock market is a rollercoaster. For already accredited investors exposed to equities, it only makes much sense to further diversify into an asset class that is less susceptible to daily market swings. In particular, real estate-backed loans, especially short-term ones, take their cue from local real estate markets, not from stock indices or global economic factors. This means that you get some stability even when other parts of your portfolio may be more volatile.

That’s where adding short-term real estate loans gives that extra layer of stability to the portfolio. At LBC Capital Income Fund, LLC, we see this day in and day out with our investors reaping the benefits of these kinds of assets that don’t move in lockstep with the stock market for a more balanced and resilient portfolio.

4. Asset-Backed Security
   The most impressive advantages of real estate short-term loans are that they are asset-backed. In other words, each loan is secured with a real estate asset. In the event of borrower default, selling the property would serve to cover the loan amount. This same collateral lessens the risk and gives a more certain assurance for the accredited investor to know that the investment he makes has a backing of a real asset.

Within LBC Capital Income Fund, LLC, our focus is on loans with solid collateral, taking the time to assess the value, location, and market potential of each property. Careful selection is synonymous, for us, with priorities of security and quality on behalf of our investors.

5. Shorter Commitment, Faster Returns
   Unlike a traditional investment in real estate, which can tie your capital up for years, a short-term real estate loan is designed for quicker returns. They range from six months to three-year investments for those ideal for people desiring to have access to their money sooner rather than later.

Short-term loans are quite appropriate for accredited investors who may not want to tie up their capital for the long haul. With the prospect of faster returns from this investment, you are able to reinvest or reallocate the funds as is needed, making this perfect for those with dynamic portfolios.

LBC Capital Income Fund, LLC’s strategy regarding short-term loans in real estate is crafted to ensure timely returns. We pick such loans that fit within manageable time frames, therefore affording our investors the chance to see returns relatively quickly without long-term commitment.

Key Considerations for Accredited Investors

While there are numerous benefits accruable from short-term real estate loans, there are a few considerations necessary for an accredited investor before he gets into the business:

• Loan-to-Value Ratios: While investing in real estate loans, consider the LTV ratio. The lower the LTV, the safer the investment, given the value of the property is far above the loan amount against it. Here at LBC Capital Income Fund, LLC, we always prefer loans with conservative LTV ratios so maximum safety can be ensured for our investors.

• Due Diligence: Not all real estate loans are created equal. As an accredited investor, you deserve fund managers who conduct your due diligence. At LBC Capital Income Fund, LLC, we have adequate, efficient, and smooth due diligence in place while securing properties, borrowers, and market conditions, thus giving investors confidence in their investments.

• Tenured Fund Managers: The management team behind a fund does matter a lot. Experienced managers understand market conditions, risk management, and the structure of loans-all significant determinants in the success of your investment. With LBC Capital Income Fund, LLC, the management team has experience in handling real estate loans; this is one factor that has ensured your investment is in capable hands.

Why Choose LBC Capital Income Fund, LLC for Short-Term Real Estate Loans?

If you are an accredited investor, there are some options available to you. But here is why we think LBC Capital Income Fund, LLC Income Fund stands out when it comes to short-term real estate loans:

• Experience: Having many years of experience in real estate and debt fund management, we know how to structure and manage loans that meet the needs of accredited investors.

• Stability: Our concentration on real estate-backed loans means that each loan is guaranteed with a concrete asset backing its deals, offering stability that’s pretty much unmatched in other alternative investment vehicles.

• Performance: Rather, let the performance speak for itself. Consistent returns of 8-10% mean our investors enjoy predictable income while diversifying away from traditional asset classes.

A Savvy Play for Accredited Investors

Short-term real estate loans are an attractive alternative for accredited investors who balance their portfolios on the axis of risk, reward, and stability. With higher possible returns, steady income, and a shorter commitment, such loans can be that jewel to strengthen and round out any diversified investment approach. And with a trusted fund manager like LBC Capital Income Fund, LLC, you have access to a carefully curated selection of loans backed by real estate, offering both security and performance.

If you’re ready to explore how bridge loans can be a part of your investment strategy, consider having a conversation with the team at LBC Capital Income Fund, LLC. We’re happy to answer questions and provide a tour of the available opportunities in this asset class.