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- If you are a natural person and you are claiming to be an Accredited Investor on the basis of having a net worth of at least $1,000,000, you will be required to provide documentary evidence of your assets dated within three months of the date of your Purchase Agreement, including without limitation: (i) bank statements; (ii) brokerage statements and other statements of securities holdings; (iii) certificates of deposit; (iv) tax assessments of real property; and (v) independent third party appraisals of assets. You will also be required to either: (a) provide a copy of a consumer or credit report dated within three months prior to the date of your Purchase Agreement from a nationwide consumer reporting agency such as Equifax, Experian or TransUnion (a “Credit Report”); or (b) consent to the Trust’s procurement of your Credit Report. You will also be required to represent that you have no other material liabilities other than those appearing on your Credit Report.
- If you are a natural person and you are claiming to be an Accredited Investor on the basis of having individual income in excess of $200,000, or joint income with you or your spouse or spousal equivalent in excess of $300,000, in each of the two most recent years and a reasonable expectation of reaching the same income level in the current year, you will be required to provide all Internal Revenue Service forms you have received or completed with respect to your taxable income for the most recent two full calendar years, including without limitation, Forms W-2, 1099, 1040 and Schedule K-1 of Form 1065.
Visit the SEC website for more information on what is an accredited investor.
WHY INVEST IN INTEGRIS SECURED CREDIT FUND II?
- Earn 12% per-annum interest rate, payable quarterly.1
Collateralized by a pledge of certain promote distributions from, and limited liability company interests in, two separate affiliated real estate ventures, as described in the Memorandum, with an estimated value of $20 million – twice the total of the $10 million in equity being raised by the fund.3
The current economic climate including inflation and recession fears, as well as rising interest rates, has investors asking where to invest now?4
Bellwether asset classes including multifamily apartments and other industrial projects are still viable, though they have lost some of the appeal they had just a few years ago. 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. 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 II with a 12% fixed interest rate.1
What is the Integris Secured Credit Fund II?
Integris Secured Credit Fund II offers accredited investors an opportunity to invest in a collateralized note that will earn them passive income via a fixed annual interest rate of 12%, paid quarterly.1 Return of investor capital will be realized by February 28, 2025, the maturity date of the fund.2
Why is it called a “secured credit” fund?
The investments are collateralized by loans made by the Fund that are secured by a pledge of certain promote distributions from, and limited liability company interests in, two separate affiliated real estate ventures, as described in the Private Placement Memorandum, with an estimated value of $20 million.3
Is Integris Secured Credit Fund II a short-term investment?
Definitions of short-term offerings vary. This particular fund matures February 28, 2025, with an option to extend one-year by mutual consent.2 Many traditional real estate offerings have investment hold periods of 5 years or more. The Integris Secured Credit Fund II will mature in a shorter timeframe.
Is this a short-term note or secured note?
Though definitions of short-term vary, the Integris Secured Credit Fund II is a collateralized note earning the investor passive income at a fixed rate through a term of 24 months – from the end of the initial offering period of February 28, 2023.2
What is Build-to-Rent, mentioned in regard to the pledged joint venture?
Build to rent, BTR, B2R or single-family rental properties are residential rental properties built for the sole purpose of rental housing intended for young families and workforce professionals. Part of the collateral for Integris Secured Credit Fund II is the Urban Pacific Workforce Housing Land Fund, which entitles land for a unique build to rent product called the Urban Town Home.
What is the intended use of the capital being raised by the fund?
Proceeds from Integris Secured Credit Fund II will be used by the borrower to provide capital to the joint venture for the purpose of securing real estate contracts and pursuing entitlements and will not be used for any site development of the underlying projects owned by the joint venture and other corporate operations. Please see the Private Placement Memorandum for details.
Is the 12% annual interest rate a targeted internal rate of return (IRR)?
No. IRR, or internal rate of return, is a term used in some real estate investments that reflects a calculated return before any fees or expenses of the fund are included. The “annual interest rate” expressed for the Integris Secured Credit Fund II is the actual amount we intend to pay investors.
What type of investment is this? Is this similar to a corporate bond, high yield bond or note?
The Integris Secured Credit Fund II is a private placement sometimes referred to as a private real estate offering and as such, information about the fund and risks are contained in the PPM. The offering is not a corporate bond, high yield bond or note.
What is the term of this investment?
The maturity date of this investment is February 28, 2025.
Is the investor charged any fees, commissions, or expenses for this investment?
The Integris Secured Credit Fund II 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 the Integris Secured Credit Fund II is February 28, 2025, with an option to extend one-year by mutual consent, 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 30-year history4 and track record of serving individual and institutional investors. A detailed track record is available within the Integris Secured Credit Fund II private placement memorandum, which all prospective investors should review thoroughly.
Is the Integris Secured Credit Fund II considered crowdfunding?
The Integris Secured Credit Fund II is a 506c offering often used in crowdfunding. 506c 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 506c or any crowdfunding model.
Will I receive a 1099 or K-1 for my taxes?
The Integris Secured Credit Fund II will issue a K-1.
112% per annum, non-compounded, payable no less frequently than quarterly. First payments commencing with the period ending on March 31, 2023.
224-month term from end of initial offering period February 28, 2023. The maturity date is February 28, 2025, with an option to extend one-year by mutual consent. May be prepaid at the Manager’s discretion. (If prepayment occurs within 9 months of the Offering Termination date, Investors are entitled to payment as if the note was repaid 9 months after the Offering Termination date.)
3The loans made by the Fund are secured by a pledge of certain promote distributions from, and limited liability company interests in, two separate affiliated real estate ventures, as described in the Memorandum. The estimated value is internally created by management based on assumptions they believe are correct. Please refer to the Private Placement Memorandum for details of the net present value calculation.
4As of June 30, 2021. See Private Placement Memorandum for complete track record. Full-cycle assets include land hard and loan assets, and commercial hard and loan assets. 1992-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.
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1. 12% per annum, non-compounded, payable no less frequently than quarterly. First payments commencing with the period ending on March 31, 2023.
2. 24-month term from end of initial offering period February 28, 2023. The maturity date is February 28, 2025, with an option to extend one-year by mutual consent. May be prepaid at the Manager’s discretion. (If prepayment occurs within 9 months of the Offering Termination date, Investors are entitled to payment as if the note was repaid 9 months after the Offering Termination date.)
3. The loans made by the Fund are secured by a pledge of certain promote distributions from, and limited liability company interests in, two separate affiliated real estate ventures, as described in the Memorandum. The estimated value is internally created by management based on assumptions they believe are correct. Please refer to the Private Placement Memorandum for details of the net present value calculation.
4. Bob Sullivan, “Top 9 Investing Trends for 2022,” Forbes (Forbes Magazine, December 30, 2021)
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 Secured Credit Fund II, 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 Secured Credit Fund II, LLC Fund (the “Credit 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 that 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.
Proceeds from the Pledge may not be available to repay the Note at the Maturity Date. The Note may be repaid
from the general cash flows of the Guarantors.
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 Note may be prepaid in whole or in part at any time.
The repayment strategy may not be successful.
The Company is not substantially capitalized and its sole asset, consisting of the Note, is secured only by the
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