Before investing, an investor must verify that they meet one or more of the following financial requirements:
- The investor’s household net worth is more than $250,000.00, excluding any equity in any real property used as the investor’s primary residence at the time of the investment; or
- The investor’s household net annual income was more than $70,000.00 for each of the previous two tax years and there is a reasonable expectation of attaining or exceeding the same income for the current
The investor must also verify that their total investments in mortgage loans secured by a lien on real property transacted by a mortgage broker or mortgage agent are not valued at more than 50% of the investor’s household net worth or household net annual income, whichever is greater.
If you have any questions regarding any of the issues discussed in this disclosure form, discuss them with your Ignite Funding Investment Agent, lawyer or financial advisor or a trusted friend or family member. No one can guarantee that a particular investment will be risk free, but with information about the specific risks involved, you can take steps to minimize your risk.
For Investor ease and convenience, we recommend that each Investor authorize a Direct Deposit transfer to their existing checking or saving account. For investments held through a Self-Directed IRA, interest payments are automatically sent to the custodian/administrator managing the account.
Interest payments are paid in arrears based on the monthly interest charged for the prior months borrowing activity.
Borrower payments are due to Ignite Funding on the 1st of each month with a 10-day grace period. Once we receive the payment from the Borrower, we clear the funds through our bank and distribute the interest payments directly to the Investors on the 15th of each month, or the business day prior if the 15th falls on a weekend or holiday. Interest is charged each month using a 30-day month interest calculation.
Loans typically range from 6 to 9 months.
Individuals: One individual holds property under an “unmarried” status to attest that there is no community property interest or under a “married” status with the accountholder declaring the assets as sole and separate property.
Joint Tenants: Two individuals hold property jointly with rights of survivorship.
Self-Directed IRA / Keoghs: An Individual Retirement Arrangement (IRA) allows a person to save and invest money for use in retirement while deferring or eliminating taxes on the account’s earnings. A Keogh plan is much like an IRA but is only available for people who are self-employed. IRAs have custodians or trustees, as do Keoghs. Vesting must always be in the name of the custodian or trustee for the benefit of the accountholder. Many traditional IRA custodians do not permit alternative investments such as Trust Deeds. Please consult with your Investment Agent for further assistance.
Pension Plans: These plans invest the retirement funds of their members and take title in the name of the pension plan.
Trusts: Investments are held in the name of a family trust, testamentary trust, charitable trust, or an irrevocable trust and are controlled by the trustee, who must be authorized by the trust document to enter into and manage transactions.
Corporation: The purchase of an investment vehicle by a corporation requires corporate authorization. Therefore, bylaws or a corporate resolution authorizing transactions are required.
General Partnership: All partners can bind the partnership and all partners are liable for partnership debts if the partnership itself fails to pay. Title is held in the name of the Partnership.
Limited Liability Company (LLC): Similar to a partnership, only without the personal liability of a general partner. LLCs are composed of “members”, one or more of which is a “managing member” with authority to contractually bind the LLC. Title is held in the name of the LLC.
Limited Partnership: Consists of one general partner and many limited partners. Only the general partner can bind the partnership, and only the general partner is liable for partnership debts if the partnership itself fails to pay. Title is held in the name of the Partnership.
Ignite Funding requires a $10,000 minimum investment amount per Trust Deed investment.
Diversification: You select the property and Borrower you want to loan to. Opportunities include land acquisition, development, construction, and existing structures for both residential and commercial properties.
Security: All loans are collateralized by a Promissory Note secured by a recorded Deed of Trust.
Built-In Equity: Varies per loan, but typical loan amounts range from 50% to 75% of the subject property’s current assessed value. Valuation methodologies could include obtaining broker price opinions, comparable sales prices, and independent appraisals.
Higher Yields: Varies per loan, with interest rates ranging from 10% to 12% per annum.
Monthly Income: Interest is paid monthly to Investors. No loads like other investments. You are getting interest paid on every dollar invested.
Short Terms: Varies per loan, with investments terms ranging from 6 to 24 months. Trust Deeds usually do not carry pre-payment penalties.
Investment Options: Investors have a number of methods to choose from, which include investing through non-qualified funds, trusts, IRA/401Ks, pension plans, LLCs, and cash accounts.
Risk Factors: As with any investment there are inherent risks. If your investment with Ignite Funding is impacted by the market or as a result of Borrower default, it is important for you to fully understand your role, rights, and responsibility as an Investor.
Your investment at Ignite Funding is a financial agreement between a Borrower and a private Investor(s) secured by real property.
A Trust Deed investment is a Promissory Note secured by a Deed of Trust recorded on real property. The Borrower executes the Promissory Note payable to the Investor(s) with the intent to pay the Investor(s) a certain interest rate on the loaned money, plus repay the principal amount within a specified time frame. Investors are recorded as beneficiaries to the property in the event the Borrower defaults on the loan obligation and loses its claim to the property through foreclosure.
Trust Deed Investments can enhance an investment portfolio with the potential to generate higher-yielding returns for Investors in the form of monthly income. While all investments involve risk, Trust Deeds offer Investors the opportunity to recoup a portion or all of their original investment through the sale of the property if the asset is taken back through foreclosure. Borrowers who seek financing from Ignite Funding range from smaller custom home builders to nationally recognized development and construction companies.
For more information click here to view the Lending Process PDF.