CLOSED MEMBERSHIP FUND LIMITED TO 100 PARTICIPANTS
(NOTE: Private Money Authority Inc. will be PMA throughout this document.)
THIS FUND WILL HAVE A SEPARATE LLC
PMA is creating a limited membership fund that will be closed to just 100 participants. Each participant will hold 1 position in the fund. Each participant will be able to borrow from the fund for the purchase, purchase and rehab of Single Family 1-4 and Multi Family 5+ properties. They will be required to have reserves and pay closing costs; but they will be able to borrow up to 70% of the After Repair Value at 100%.
I want to create an opportunity for Real Estate Investors to have a streamlined process to funding their deals. You should be able to go to a Foreclosure Auction with cash on hand and to also be able to take advantage of opportunities. As a participating member you will have benefits no competitor will have. You will have a standing Line of Credit, POF and Auction Account.
Open Enrollment will be offered annually when the membership is less than 100 however a committee made up of plank owner members will interview, vet and vote on new participants.
Participants must either have experience and provide a biography, list of real estate owned, rehabbed and sold backed with a financial statement certified by a CPA or other acceptable entity (OR) participate in an ongoing education and mentorship program offered by PMA.
Participants will have an initiation fee of $2,500.00 with a deposit of $1,000.00.
REGULATION D 506 (C) –
PMA will file Form D with the Securities and Exchange Commission on or about June 1, 2019. This will allow us to solicit and advertise for Accredited Investors to participate in the fund. We will seek a minimum of $50,000.00 up to and in excess of; $100,000,000.00 (ONE HUNDRED MILLION DOLLARS).
Accredited Investors will have a preferred return of 8%. Disbursements will begin 9-12 months after the fund is subscribed.
PMA will prepare a Private Placement Memorandum, Subscription Agreement, and a Presentation Grade offering including magazine quality flipbook, website, portal and landing pages as well as schedule investor webinars.
Each participant will upon making the $1,000.00 deposit submit the following: (Note: participants must be an entity either LLC or Inc.
1. Biography of themselves and their business entity.
2. Summary of experienced in real estate investment.
3. Schedule of Real Estate Owned and Sold.
4. Rent Rolls for Buy and Holds.
5. Financial Statement approved by a CPA or equivalent.
Participants will be featured in the offering including the flipbook and presentation. A Who’s Who type of format. Each participant will be asked to submit a Vision Statement, Logo for their entity and a headshot of the Principal(s).
Board of Directors
There will be 10 board seats.
1. 4 seats held by participants.
2. 4 seats held by Accredited Investors.
3. 2 seats appointed by the Manager.
PMA will be the manager of the fund and oversee systems, processes, underwriting, financial reporting, compliance and regulatory affairs.
The Manager will report to the Board of Directors. The manager may be removed by a Super Majority of 7 members of the board.
The Manager will be compensated at 2% of the total fund plus 1 point on all loans made to members.
The Manager will employ an Underwriter, Loan Processors and other administrative and office personnel including vendors for auditing, marketing and other tasks.
Use of Funds
Outside of securing an office location and the services needed to support that endeavor the use of funds will be as follows:
1. 45% of all funds will be placed in trust with a 3rd party only. These funds can only be transferred or used after a vote by the finance committee of the Board of Directors.
2. 45% will be placed in the loan and operations fund. These will be available for disbursement by the Finance Director, Underwriter and Treasurer of the Board of Directors.
3. 10% will be in allotted to PMA for payroll, marketing, office and other expenses.
All participants and Accredited Investors will receive a monthly financial report that will include:
1. Available cash in all accounts.
2. Loans Approved, Underwritten and Funded.
3. Interest earned on funded loans.
4. Pending defaults.
5. Loans repaid.
6. Office Expenses
7. Manager Compensation
In addition, all AI’s will receive their K1’s and other documents as required by law and for compliance.
3rd Party Verification
We will have 3rd party verification for compliance, auditing and tax reporting.
All participants will have a standing $1,000,000.00 line of credit and POF (proof of funds) letter. They will have a dedicated person in the office to verify funds.
All loan packages will need to include the following for each loan to be evaluated, processed, underwritten and funded:
1. Purchase and Sale Agreement.
2. Loan Cost Worksheet (PMA provided).
3. Appraisal Report.
4. Hazard Insurance for Property.
5. Scope of Work for Rehab.
6. Contract with a Licensed General Contractor or approved equivalent.
7. Draw schedule.
8. Underwriting Analysis.
9. Loan Committee Approval.
10. Funding Officer issues funds to the closing agent or closing attorney.
All loans will be serviced by a 3rd party vendor. Disbursements will be made to the 3 accounts. 45/45/10.
Investor Relations Executives
In addition, we will have a dedicated Investor Relations Executive to work with our AI’s. They will only work with them and report directly to the BOD and Manager. IRE’s will be compensated at 1% of the total fund.
Credit Lines and Positions
As a participating member once, the fund is subscribed you will have a credit line of $1,000,000.00 for each position you hold. If you have 3 positions, you will have $3,000,000.00 and so on. Each position is $2,500.00. There will be a maximum of 100 positions and a limit of 50 for a single member. Remember that securing a position only happens once.
How to Secure Your Membership and Position(s)
Enrollment will occur upon the receipt of a Letter of Intent in any written form such as email followed by submittal of the enrollment form which will be sent to you for signing and the initial payment of $1,000.00 per position. Once the PPM, Subscription Agreement and Presentation are completed the final payment of $1,500.00 per position must be made.
How Soon Will Funds Be Available
It is our INTENTION to have funds available within 90 days of opening the fund. A variety of factors will play into that. We will need a minimum of $10,000,000.00 from AI’s and our plan is to oversubscribe the offering at 120% or $120,000,000.00.
Funds from AI’s will be placed into a 3rd party trust and cannot be used until the present minimum of $10,000.000.00 has been invested. Should we not secure this minimum those funds will be reimbursed minus a 3% handling fee. $1,500.00 of the participating members funds will be reimbursed as well minus 3% for handling and processing. The initial payment of $1,000.00 shall not be reimbursable.
1. PPM, Subscription Agreement, 506(C) - $10,000.00
2. Legal - $10,000.00
3. Office - $10,000.00
4. Presentation - $5,000.00
5. Investor Portal -$5,000.00
6. AI Lead Generation -$5,000.00
7. Promotion -$10,000.00
8. Investor Conference -$30-45,000.00
Total of $100,000.00
*Additional membership funds will be placed into the 3 account for office, admin and marketing.
President and CEO
Private Money Authority Inc.
Fund Manager and CEO
By June 1, 2019 I will have this ready.
– Table of contents
– Investment summary
– Return on investment terms
– All 50 State Blue Sky Legends are included as well as the District of Columbia
– Management fee details
– Regulation D disclaimers
– Offering summary
– Business Plan section (many elements are already in the document)
– Interactive Fund investment flow chart
– Investment structure
– Property risk analysis
– Income appreciation flow chart
– Construction flow chart
– Commercial and residential property definitions
– Management/director/officer backgrounds
– Use of Proceeds
– Terms & Conditions
– Investment requirements
– Risk Factors
– Competitive analysis
– Dilution and ownership detail
– Plan of placement
– Subscription Agreement
– Investor Suitability Questionnaire
– SEC Form D (PDF Format)
– State Blue Sky Forms (PDF Format)
– ERISA Language
– Patriot Act Disclosure
Flipbook – www.flipsnack.com
Portal – www.investorportal.com
Landing Pages – www.phonesites.com
Office – 717 17th Street Denver, Colorado
AAPL – American Association of Private Lenders
Investor Conferences – www.pitbullconference.com