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WHY INVEST IN PARKHOUSE CREDIT FUND?
Earn 15% interest on your investment. The assets of the company will consist solely of an unsecured note. The note accrues interest at 15% per annum, payable upon the maturity date.1
The 30-unit, luxury condominium project is part of the 25-acre Uptown Newport Master Plan development located in Newport Beach, California.
Construction is currently 65% complete with the first of five building expected to be delivered in spring 2024. The fifth and final building’s expected delivery date is during the summer of 2024.
Half of the condominiums being developed are already under contract to be sold to individual buyers.
- 30-unit luxury condominium
- 1.5-acre site
- Five buildings, consisting of six condo units each
- Located in one of California’s wealthiest cities
- Part of the Uptown Newport Master Plan, a 25-acre master plan transitioning from office and industrial use
- Phased development by Shopoff since 2010
- Nearby Amenities: John Wayne Airport, Fashion Island shopping, University of California at Irvine.
What is the Integris Parkhouse Credit Fund?
Integris Parkhouse Credit Fund offers accredited investors an opportunity to invest in a note that will earn them passive income via a fixed annual interest rate of 15%, accrued and paid upon maturity.1 Return of investor capital will be realized by September 30, 2024, the maturity date of the fund.2
Is Integris Parkhouse Credit Fund a short-term investment?
Definitions of short-term offerings vary. This particular fund matures September 30, 2024, with an option to extend up to six months.2 Many traditional real estate offerings have investment hold periods of five years or more. The Integris Parkhouse Credit Fund will mature in a shorter timeframe.
Is this a short-term note or an unsecured note?
Though definitions of short-term vary, the Integris Parkhouse Credit Fund is an unsecured note, backed by a guaranty of William & Cindy Shopoff, the principals of Integris Real Estate Investments and its parent company, Shopoff Realty Investments. Investors will earn a fixed rate through September 30, 2024.2 Interest will be accrued and paid upon maturity.
What is the intended use of the capital being raised by the fund?
Proceeds from Integris Parkhouse Credit Fund will be used by the borrower to complete the development of 30 luxury condos, located in Newport Beach, California, known as “Parkhouse Residences.” Please see the private placement memorandum for details.
Is the 15% annual interest rate a targeted internal rate of return (IRR), a preferred return or a fixed rate?
The “annual interest rate” expressed for the Integris Parkhouse Credit Fund is the actual amount we commit to pay investors. A preferred return, as other funds may advertise, is an accrual to be paid to investors first if the project is profitable enough to cover this obligation. An IRR (internal rate of return) is a figure commonly seen in financial projections of what some investments hope to achieve. The 15% fixed return of the Integris Parkhouse Credit Fund is not a preferred return or IRR projection.
What type of investment is this? Is this similar to a corporate bond, high-yield bond or note?
Integris Parkhouse Credit Fund is a private placement sometimes referred to as a private real estate offering, Reg D offering or private fund, and as such, information about the fund and risks are contained in the private placement memorandum. The offering is not a corporate bond, high-yield bond or note.
What is the term of this investment?
Twelve months from the effective date of the fund until the scheduled maturity date of September 30, 2024.2
Is the investor charged any fees, commissions or expenses for this investment?
Integris Parkhouse Credit Fund has no upfront sales charge, nor does it charge any fees or expenses to investors.
When will investors’ capital investment be returned?
The maturity date of Integris Parkhouse Credit Fund is September 30, 2024, with an option to extend up to an additional six months,2 at which point the capital invested will be returned to investors.
How long has Integris been in business? What is the track record of Integris?
Integris and its affiliated companies have a 31-year history3 and track record of serving individual and institutional investors. A detailed track record is available within Integris Parkhouse Credit Fund’s private placement memorandum, which all prospective investors should review thoroughly.
Is the Integris Parkhouse Credit Fund considered crowdfunding?
Integris Parkhouse Credit Fund is a 506(c) Regulation D offering often used in crowdfunding. 506(c) offerings, also known as private placements, are only available to accredited investors.*
Is real estate crowdfunding only for multifamily?
No. Crowdfunded offerings can be virtually any asset class. BTR or build-to-rent, industrial, hospitality and fixed rate credit funds can utilize the 506(c) or any crowdfunding model.
Is this fund considered a private credit fund or a private debt fund as I’ve seen mentioned in articles about commercial real estate?
While both terms are often used interchangeably, they commonly refer to private investments with a debt structure instead of an equity structure.
Will I receive a 1099 or K-1 for my taxes?
Integris Parkhouse Credit Fund will issue a K-1.
Would Integris Parkhouse Credit Fund be considered a high yield investment?
High-yield is a term usually used to describe bonds (also called junk bonds) that pay higher interest rates because they have lower credit ratings than investment-grade bonds. High-yield bonds are more likely to default, so they pay a higher yield than investment-grade bonds to compensate investors. It’s important to evaluate what collateral or other terms provide investors some type of recourse in the event of a default.
The current economic climate including inflation and recession fears, as well as rising interest rates, has investors asking where to invest now?4
Recent turmoil in the banking sector has also led to a re-evaluation of exactly how much money investors want sitting in banks. Bellwether real estate asset classes including multifamily apartments, commercial and industrial projects are still viable, though there seems to be a flight to quality with accredited investors. Factors such as the sponsor’s track record and previous experience navigating rising interest rates have taken on higher importance. BTR or build to rent projects increased in popularity as of late and continue to be of interest to investors.
Alternatively, many investors are looking for shorter duration investments, yet the desire for high yield still remains. Investment options with a short or shorter term than traditional real estate projects and high yield are a particular interest as investors seek places to ride out the economic uncertainty. Some investors simply want a fixed return in periods of uncertainty.
While short-term and high yield don’t typically go hand in hand, changes in interest rates and the underlying real estate market have created market dynamics not seen in other economic cycles.
Options available include high-yield corporate bonds, private debt funds and short-term notes among others. Maturities of 18 to 36 months seem popular with investors seeking yield in the short term but wanting liquidity to coincide with improving market conditions. It’s important for investors seeking high yield and short-term to play close attention to the collateral behind these investments or how they are secured as well as thorough review of offering documents. Market conditions have investors looking for the best of both worlds, however they should understand that investments with higher yields may be considered riskier investments and success is not guaranteed.
We invite you to register for access to review the offering materials for the Integris Secured Credit Fund III with a 12% fixed interest rate.1
How the Investment Process Works
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1. 15% per annum, non-compounded, payable upon the maturity date.
2. Maturity date is September 30, 2024. The term may be extended by one additional six (6) month period.
3. As of March 31, 2023. See Private Placement Memorandum for complete track record. Full-cycle assets include land hard and loan assets, and commercial hard and loan assets. 1992 to present as Asset Recovery Fund, Eastbridge Partners and Shopoff Realty Investments (formerly known as The Shopoff Group). William Shopoff is the Founder and Principal of all these entities. Performance has varied in this time frame with certain offerings having generated losses that are detailed in the track record. Past performance is not indicative of future results.
4. Bob Sullivan, “Top 9 Investing Trends for 2022,” Forbes (Forbes Magazine, December 30, 2021).
*An “accredited investor:”
1. Has income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year.
2. Has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence). Visit the SEC website for more information on what is an accredited investor.
You should read the Memorandum for any prospective investment and examine the suitability of this type of investment in the context of your own needs, investment objectives, and financial capabilities and should make your own independent investigation and decision as to suitability and as to the risk and potential gain involved. Also, you are strongly encouraged to consult with your own tax advisor and your own attorney, accountant, financial consultant or other business advisor regarding the risks and merits of the proposed investment. This communication and any Memorandum do not constitute tax advice to any prospective investor.
Integris Parkhouse Credit Fund, LLC is a 506(c) offering, as defined by the U.S. Securities and Exchange Commission, for accredited investors only. This is neither an offer to sell nor a solicitation of an offer to buy any security. An investment in a limited partnership involves a high degree of risk, including the possible loss of your investment, and is illiquid with an uncertain liquidity date. Past performance is not indicative of future results. Securities offered through Shopoff Securities, Inc., member FINRA/SIPC.
Important Information – Risk Factors
An investment in Integris Parkhouse Credit Fund, LLC (the “Fund”) must be considered speculative and adds a high degree of risk. There are no guarantees of distributions or returns, and an Investor may lose all or part of their investment. There are various risks related to an investment in the Fund which are described in the Private Placement Memorandum. These risks include, but are not limited to:
- The Interests may not be suitable for certain Investors.
- The Interests will be highly illiquid, no trading market exists or will ever develop, and withdrawals of capital contributions are prohibited.
- The Fund is a recently formed entity with no operating history and no assurance of success.
- Success is dependent on the performance of the Fund’s Managers, as well as individuals who are affiliates of the Fund’s Managing Members.
- The Fund depends on key personnel of the Manager and its affiliates, the loss of any of whom could be detrimental to the business.
- The Note may be repaid prior to the Maturity Date, provided, however, the interest will be paid as though the Note was repaid on the Maturity Date.
- Economic, market, and regulatory changes that impact the real estate market generally may decrease the value of a Fund’s investments and weaken operating results.
- The Company is not substantially capitalized, and its sole asset consists of the Note.
- Members will have no right to participate in the management of the Company.
- The ability of the Borrower to make the Note payments to the Company, and thus the ability of the Company to make distributions to the Members, will be dependent on the repayment strategy set forth below in the section on “Repayment Strategy,” which may not be successful.
- Certain tax risks