RJJ Wholesalers - Short Term Real Estate Fund

Min. Invest $25,000
Target Hold 12 mo
Annualized Returns 20%
Progress - 0% Pledged
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Private Offering

Introduction

Trade Winds Real Estate is a real estate investment and management company founded in 2013. In conjunction with our private lending company, Brisco Funding, we have been on the buying, selling or financing side of more than $30M worth of real estate transactions. With this offering, we aim to capitalize on a lucrative opportunity in the residential real estate markets. Utilizing our network of buyers, sellers and developers we will attain residential properties at below market values and sell them in one to two months for a substantial profit.

 

Fund Highlights

  • High Return. The target return of the fund is 20% annually.

  • Growth or Income. Profits can be distributed as dividends or reinvested for maximum growth.

  • Short Time Horizon. There is no minimum lockup period and funds can be available for withdrawal in 30-60 days.

  • No management fee. Manager is paid only a percentage of the profits (30%), so the manager’s interests are perfectly aligned with those of the investors.

  • Full transparency. Investors can see statements updated daily on our portal.

 

Investment Strategies

Wholesaling is the practice of buying distressed residential properties and then reselling them as quickly as possible. In most cases, a property is sold to another real estate investor who will renovate the property and then sell it to the ultimate homeowner. We will employ multiple strategies around this activity to earn a profit.

Trading Contracts. Our first strategy works as follows. We have partnered with an experienced developer in New Jersey who attends Sheriff’s Sale auctions every week. The properties for sale at these auctions are in foreclosure and are being sold by the mortgage holder and are thus frequently available at a significant discount. When we are the highest bidder, we give a 20% deposit (in the form of cashier’s checks) and receive a contract to purchase the property. We then turn around and sell that contract as quickly as possible, without ever actually purchasing the property (that is, without “closing”). Doing so allows us to earn substantial profits with a minimal outlay of cash. The profits are then shared with the developer.

A typical deal went as follows. At the Sheriff’s Sale in Essex County on June 19, we were the highest bidder for a property in Newark, NJ with a bid of $150,000. We put down the required 20% deposit of $30,000. That contract was then sold two months later for $38,800. The profit of $8,800 was shared equally with the developer, so the Fund earned $4,400, a return of 15% on our investment.

As of August, 2018, we have paid deposits on 25 properties and traded out of about half of them. You can download a complete list of these properties from our investor portal (see below).

Wholesaling Properties. In Atlanta, we have partnered with an organization which is able to obtain residential real estate at below market values by utilizing an ongoing direct marketing campaign. Once they locate a property, they are frequently able to find an end buyer for that property before they purchase it. Typically, the two closings are scheduled to occur about ten days apart. RJJ Wholesalers funds the initial purchase (all cash, no debt) and becomes the owner of the property. When the property is sold, the profits are shared with our partner.

Private Lending. To keep our cash deployed and earning a return between deals, we may make short term loans to other investors for the purpose of wholesaling. Typically, these are short term loans secured by first position mortgages at low LTV’s that get paid back in 30-60 days.

 

Distributions

Profits from the fund will be distributed quarterly. Investors can elect to receive distributions by ACH or to have their profits automatically reinvested back into the fund.

 

Withdrawals

There is no minimum lockup period for an investment in the Fund and withdrawal requests can be submitted at any time. However, investors must understand that the fund is not liquid and very likely will not have cash on hand to service a withdrawal request immediately. Withdrawal requests will go into a queue and be serviced in the order received as funds become available. Investors should expect to wait 30 to 60 days for a withdrawal request to be satisfied but should also understand that it could take even longer if cash is not available.

Manager Compensation

The manager and sponsor of the fund is Trade Winds Real Estate. Unlike most funds, the manager is compensated only with a percentage of the profits (30%) and does not earn a management fee on the total assets under management or any other fee income. In this way, the manager’s interests are perfectly aligned with those of the investor as our only financial incentive is to earn a profit. The manager is paid quarterly at the same time investor distributions are made.

 

Track Record

The Fund began operation in March of this year so it has a very limited track record. As of August, we have earned a profit of $56,375.00

 

Investor Reporting and Communication

In the areas of reporting and communication we are striving for full transparency. We are in the process of setting up an investor portal which will give access, in real time, to the Fund’s balance sheet, year-to-date PNL statement, and bank statements. In this way investors can continuously gauge the financial health of the Fund. Some of these reports can already be accessed here.

In addition, investors will receive quarterly statements showing their personal investments, withdrawals, distributions, and current Capital Account balance. Finally, we will hold annual video conference calls to discuss the Fund’s performance.

 

Risks

There are many risks inherent in this investment. Investors are urged to read the section on Risks in the Private Placement Memorandum carefully before investing.

 

Debt

The Fund will not use leverage to make investments. That is, we will not borrow money to put down deposits at auction, buy properties, or fund loans. There are, however, certain situations where we might need to borrow money to prevent losses. For example, if we are forced to close on a property that we were awarded at auction and we did not have enough cash available to close, we would most likely borrow funds so that we could close to prevent losing our deposit.

 

Next Steps

The offering documents are available on this web portal.

For questions or to discuss further, please contact us directly:

  • Phone: 914 861 2450
  • Email: info@tradewindsrealestate.net

Investment Type: Term: Raise Amount: IRR:
Equity
12 Months $10,000,000 20%

Financial Summary

This fund is unleveraged--that is, we have no debt and will not borrow money to fund operations. The only exception is if we are forced to close on a property that was bought at auction; in this case, we may take a loan to complete the transaction.

Financial Sources

Equity $10,000,000

Financial Uses

Fund purchases $9,500,000
Operations $500,000

Primary Markets: Newark, NJ and Atlanta, GA

We are currently focused on two markets: Newark, NJ and Atlanta, GA. In both of these markets we have established relationships with partners who have been immersed in these local markets for years and in turn have deep relationships with multiple buyers and sellers. These partners are our boots on the ground. They are extremely well versed in buying properties at auction and other methods of obtaining real estate at below market values.