The Income Fund
The Income Fund
Nationwide Portfolio of Performing Loans
Paper Profits Income Fund LLC is a private investment fund formed to take advantage of market opportunities in the areas of real-estate secured private loans and institutional mortgage debt with a focus on performing mortgage notes.
These loans are purchased at a discount relative to value, with a view toward achieving attractive returns on the fund’s invested capital.
The fund purchases only performing mortgages, much like the mortgage you may have on your home. Each month the borrower’s send in a payment, consisting of principal and interest. It is from these payments that the fund pays investors and continues operation.
The model is very stable, low overhead and predictable. An ideal place to park savings or self-directed retirement account funds.
The fund pays investors a preferred return of 8.5%, with qualified investors who contribute $250,000 or more, receiving additional profit share from early loan payoffs.
Investors receive a base return of 8.5% per year and can increase that up to 18.2% once compounding and profit sharing are accounted for.
Minimum investment is $50,000 and is only open to accredited investors.
Contact us for offering documents and more information.
Frequently Asked Questions
Please see the video at the top of this page for a brief outline of how the fund works and how investors are paid.
Investors are paid monthly. There is also a reinvestment option available, giving you the ability to apply compound interest to your investment. Using this method investors can earn up to 18.2% per year.
Management is paid after investors are paid. Management is paid from any proceeds above the portion paid to investors.
12 months is the minimum investment period. You can investo for an unlimited time period or whenever you would like to withdraw.
As with any investment, there are risks. This form of investment is inherently very stable and secure, however it does come with risks. Ask us for more details on this investment and the potential risks.
This asset class is very stable. Because the fund invests only in mortgages on single family properties occupied by borrowers, loan default rates are extremely low, and do not affect cash output of the fund. Any loans which become non-paying over time are removed from the fund, so only performing and income producing loans are kept.
To withdraw your investment anytime after the 12 month comitment period, simply contact us and we will send you a redemption form to complete. The form will ask you where to send the funds, and confirm key information with you. Management will then send your original investment back to you.
Occasionally borrowers have hard times, and may stop paying their mortgage. This happens on about 3-4% of the portfolio. When a borrower becomes non-paying, the loan is removed from the fund so it does not affect profitability. Only performing loans are kept in the fund.
Because the fund is a secured creditor, we have a home to forclose on or “take” to recover invested funds. Home prices do affect the security of the mortgage loan, but only in the sense of how much the performing loan is worth if sold. The fund buys loans with sufficient equity coverage to hedge against this potentiality. In general, fluctuating home prices do not affect the cash-flow to the fund or to investors.
The federal interest rate or rate a new loan can be obtained does not affect our current portfolio. Loans have a fixed income stream, and moving interest rates as well as stock prices or public sentiment do not affect cash-flow to the fund.
Yes. As with any investment it is important to adjust purchases to account for risk. Diversification in the fund takes place by investing in multiple geographic areas, markets and states. This provides safety in the fact not all investor funds are invested in one area. This provides long-term stability.
We have a 3rd party CPA which processes all distributions to investors, and a seperate 3rd party audit company which verifies our accounting at the end of each year. This provides peace of mind the books and accounting, as well as distributions to investors are true and accurate.
Mortgage investing is unique in the sense it provides stability in the form of regular cash-flow. It also has a real estate component, where we are a secured creditor with collateral which is real estate. It is the best of both worlds, cash-flow and real estate.
We are located in Austin Texas.