PROVEN HISTORY
BY THE NUMBERS
Key Facts & Figures as of We Lend inception since 2018*
Note: The facts and figures contained herein are representative of We Lend, LLCs performance. Past performance is not a guarantee of future results. *Data as of 11/08/2022
$478MM
Total Amount Funded
$0
Principle Loss
1,200+
Loans Funded
9.9%
Avg. Borrower Interest Rate
77%
Avg. Leverage at Purchase
220+
Loans Currently Co-Serviced
61%
Of Loans are Repeat Borrowers
Through We Lend, the management team has originated 1,200+ loans, a face value of $478MM+
Loans are primarily made to experienced real estate investors who are in the business of rehabilitating discounted investment properties
Principals invested personal capital into the fund
The Fund is run by experienced real estate investors & lenders who provide keen insight into how to be a creative and responsible lender
The Fund intends to sell selected loans in the secondary market to institutional loan buyers and/or replenish the loans through a credit facility, enabling us to generate a higher yield & mitigate risk
BY THE NUMBERS
Loan Characteristics
Note: The facts and figures contained herein are representative of We Lend, LLCs performance. Past performance is not a guarantee of future results* 2+ Investments
$402K
Avg. Loan Amount
12 Months
Avg. Loan Term
58%
Avg. Loan to After Repair Value
$2.5M
Avg. Borrower’s Net Worth
695
Avg. FICO Score
44
Avg. Age of Borrower
74%
Of Borrowers are Experienced Investors*
INVESTOR SECURITY
Alignment of Interest
Principals invested their capital in The Fund alongside investors
Profit splits occur only after investors receive their preferred return
Security
Safer part of the capital stack
Real estate-backed protection
Senior (1st) lien position
Diversification
Loans are diversified geographically and across several resilient asset classes (residential focus)
Risk is spread across a portfolio of loans
Distribution Frequency
Instant Cash-Flow. The Fund makes monthly distributions
Passive Cash Flow
Delivering attractive returns with first-lien protection and limited liability to LPs
Predictable and consistent returns
Non-Correlated Returns
Our yields are stable because they are not tied to the volatile stock market
Velocity of Capital / Loan Sales
The Fund intends to sell selected loans in the secondary market, enabling us to capture a yield at sale while shifting the default risk, and reinvesting the replenished funds into another loan. The velocity of the fund-sell strategy allows for multiple transactions during the term, creating a higher alpha in the portfolio and mitigating risk
Underwriting
Loans must meet our stringent underwriting guidelines & those of our institutional loan buyers. We place a lot of emphasis on loan-to-value ratios, asset location, borrower experience, borrower FICO, and/or asset class
We must fund institutional-grade loans to ensure the loans can be replenished through a credit facility and/or sold
Risk Adjusted Returns
While generating above-market returns, The Fund reduces exposure to market volatility because of the short-term nature of our loans
Fundamentally, debt investments are safer than an equity investment
WHAT'S NEXT
Velocity of Capital
The Fund intends to sell loans in the secondary market to institutional loan buyers and/or replenish the loans through a credit facility, enabling us to generate a higher yield & mitigate risk
Note: These statements reflect We Lend, LLC’s views and assumptions regarding future events and performance. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are important factors that could cause We Lend, LLC’s actual results to differ materially from those indicated in these statements.
Higher Yield Illustrated:
A loan is funded to a borrower at 12%. The loan is then replenished at ~7.5% or sold at ~10.5%. Once replenished or sold, the capital is re-invested into another loan. While The Fund only retains a ~1.5% to ~4.5% spread, repeating this transaction multiple times a month/year generates a higher yield than 9.5%.
For example:
Let’s say we fund and sell loans once a month and we capture a 2% spread on each transaction.
Risk Mitigation
Selling the loans transfers the default risk to the note buyer.
TYPICAL LOAN CHARACTERISTICS
Loan Type
A non-consumer, interest-only, Business Purpose Loan (BPL) made to real estate operators and investors, and secured through a first lien mortgage against real estate. Also known as: Hard Money Loan
Property Type
- Non-owner occupied residential: 1-4 units
- Multi-Family Properties: 4+ Units
- Mixed-Use Properties: (Typically 50%+ Residential)
Loan Programs
- FixNFlip
- Rental
- Multifamily
- New Construction
Loan to Value
Up to 85% of the acquisition price (compensating circumstances must exist for 90% leverage)
- 82% — Avg. Leverage at Purchase
- 57% — Avg. Leverage against the After Repair Value
Geography
- Nationwide, with a primary focus on the
EAST COAST
Borrower
- Loans are primarily made to experienced real estate investors who are in the business of rehabilitating investment properties
Down Payment
Mandatory 15-35% cash down payment by the borrower
Rates
Interest Rates range from 9-12%
Term
- Short duration: 12 month loans
- Extensions not guaranteed: 3-6 month intervals on case by case basis
Construction Financing
- Option to finance renovation
- If funded, the funds are not disbursed until the work is completed by the borrower. Subject to physical inspection
Strict Underwriting
6-point review: Our underwriting happens in-house. Being former real estate investors enables us to spot a bad loan and/or borrower very quickly
-
Property
- Location - market conditions
- Property condition
- Complete Appraisal Report
- Vetted & insured appraisers
- Conservative valuations
- ARV, AS-IS, and/or rent schedule reports
- Stress-test the appraisal
- Independent comparable search
- Tax Records - how is it taxed, are there any tax liens?
- Department of Building Records
- SOW & Property Inspection Reports
- Transaction History - how has the property traded in the past?
- Confirming the transaction is arms-length
-
Borrower
- Borrower Experience: we look closely at a borrower’s experience. While most of our borrowers are experienced, a loan issued to an inexperienced borrower is compensated by lower leverage.
- Net worth & liquidity has to meet specific thresholds
- Full tri-merge credit report - review the borrower’s tradelines, usage, payment history, etc.
- Conduct a full background search on the borrower
Borrower is required to have “skin in the game” - equity invested at acquisition & construction
-
Credit Facility and/or Loan Buyer Review
- Before funding, we check that loans conform to the underwriting guidelines of our institutional loan buyers and/or our credit facility
-
Title Review & Insurance
- Chain of title
- Encumbrances
- Property Insurance: Builders risk is required. Compliance is verified by our team & a 3rd party
- Bind title insurance with a lender’s policy
-
Construction Financing
- Construction loan is held back. Funds disbursed based on work completed
- Physical inspection with a full construction inspection report
-
Legal Review & Approval
- Our legal team is vetted, insured, and highly experienced working with major lenders and loan buyers
- Strict mortgage documents with Personal Guarantees from borrower
- Reviews title to ensure that the lender's policy is secured
- Location - market conditions
- Property condition
- Complete Appraisal Report
- Vetted & insured appraisers
- Conservative valuations
- ARV, AS-IS, and/or rent schedule reports
- Stress-test the appraisal
- Independent comparable search
- Tax Records - how is it taxed, are there any tax liens?
- Department of Building Records
- SOW & Property Inspection Reports
- Transaction History - how has the property traded in the past?
- Confirming the transaction is arms-length
- Borrower Experience: we look closely at a borrower’s experience. While most of our borrowers are experienced, a loan issued to an inexperienced borrower is compensated by lower leverage.
- Net worth & liquidity has to meet specific thresholds
- Full tri-merge credit report - review the borrower’s tradelines, usage, payment history, etc.
- Conduct a full background search on the borrower
Borrower is required to have “skin in the game” - equity invested at acquisition & construction
- Before funding, we check that loans conform to the underwriting guidelines of our institutional loan buyers and/or our credit facility
- Chain of title
- Encumbrances
- Property Insurance: Builders risk is required. Compliance is verified by our team & a 3rd party
- Bind title insurance with a lender’s policy
- Construction loan is held back. Funds disbursed based on work completed
- Physical inspection with a full construction inspection report
- Our legal team is vetted, insured, and highly experienced working with major lenders and loan buyers
- Strict mortgage documents with Personal Guarantees from borrower
- Reviews title to ensure that the lender's policy is secured
TYPICAL LOAN FUNDING PROCESS
Loan Origination
Borrower completes application with supporting documents
Processing
Processing dept collects supporting documents (i.e. PFS, SREO, SOW), pulls credit, conducts background & OFAC search, & orders appraisal
Underwriting
Underwriting dept reviews all documents, background searches, credit reports, appraisal, & validate property value
Credit Facility / Loan Buyer Review
If the loan is to be replenished through a credit facility or sold to a loan buyer, then the loan is discussed with that party for a second review and soft approval
Legal Review
Legal dept reviews title, property insurance, entity & other legal documents. Prepares loan documents and ensures compliance
Closing/Funding
Closing is scheduled, and the loan is funded
Loan Replenished or Sold
The loan is typically replenished through a credit facility and/or sold to a loan buyer
WHAT PRECAUTIONS IS THE FUND IMPLEMENTING TO REDUCE OUR EXPOSURE TO MARKET VOLATILITY?
Tightened Lending Criteria and Underwriting
Reduced our leverages, effectively requiring borrowers to have more skin in the game
Stress Test Cash Flows
Cash Flows: we analyze the property's current or potential cash flows to ensure that it will be sufficient to cover our mortgage and qualify for a refinance
Increased Our Credit Standards
Currently, 85% of our borrowers are institutional grade with high FICO scores, experienced, and HNW - we want to keep it that way
Stress Test Appraisal
Market Adversity: we stress test the property’s appraisal to ensure that the loans we make are conservative enough to be secured against value fluctuations
WHY DO OUR BORROWERS NOT UTILIZE TRADITIONAL BANK FINANCING?
Speed
We fund loans in as few as 3 days. Borrowers use speed to their advantage when negotiating with their seller
Asset Condition
Traditional banks are unwilling to finance distressed properties
Red Tape
Banks have complex routines and procedures which make it difficult for the borrower to qualify
Competitiveness
Borrowers use a private lender as an advantage against mortgage contingent buyers
Reliability
Traditional banks lack the experience & understanding of the real estate investment space
Guidance
The Fund is run by experienced investors who can guide and consult the borrower through their investment process
WHY INVEST WITH US?
We Are Aligned
GPs are invested alongside their investors
GPs are not earning profits from the fund until the preferred return is paid to our investors
Loan Sales + Yield Enhancement + Risk Mitigator
Selling loans enables the fund to capture a higher yield while transferring the risk and reinvesting the replenished funds into another loan
Diversification
Loans are diversified geographically and across several resilient asset classes
Risk is spread across a portfolio of loans
Underwriting and Deal Flow
Loans must meet stringent underwriting guidelines. We do not outsource our underwriting
Principal Protection
$0 principal loss
Real estate-backed protection
Senior (1st) lien position
Safer part of the capital stack
Transparency
The Fund has a 3rd party fund administrator and loan servicer
Experienced Fund Managers
The Management team has originated 1,200+ loans, a face value of $478MM+ (& currently co-servicing 220+ loans)
While the team originated 1,200+ Loans, we’ve denied 3,000+ Loan requests—we’ve seen a lot
The Mgmt team were real estate investors, specifically in the FixNFlip space, which provides keen insight into how to be a creative & responsible lender
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DISCLOSURE
This presentation for We Lend, LLC and any appendices or exhibits (the "Presentation") have been prepared by We Lend, LLC for information purposes only. This Presentation is confidential and for its intended audience only. Recipients of this Presentation may not reproduce, redistribute or pass on, in whole or in part, in writing or orally or in any other way or form, this Presentation or any of the information set out herein. This presentation does not constitute an offer to sell or a solicitation of an offer to purchase limited partnership interests in any security.
Any prospective investor is advised to carefully review all of the private placement memoranda, operating agreement, and subscription documents ("Investor Documents") and to consult their legal, financial, and tax advisors prior to considering any investment in We Lend, LLC. The materials contained in this Presentation contain a summary and overview of We Lend, LLC as currently contemplated by We Lend, LLC in order to obtain initial feedback from potential investors. We Lend, LLC may change some terms prior to the finalization of the Investor Documents. This presentation does not purport to be complete and is superseded in its entirety by the information contained in the Investor Documents. Past performance is not indicative of future returns or results. Individual investment performance, examples provided, and/or case studies are not indicative of the overall returns of We Lend, LLC.
In addition, there can be no guarantee of deal flow in the future. Some of the statements in this Presentation, including those using words such as "targets," "believes," "expects,'' "intends,'' "estimates,'' "projects,'' "predicts,'' "anticipates,'' "plans,'' "pro forma,'' and "seeks" and other comparable or similar terms are forward-looking statements. Forward-looking statements are not statements of historical fact and reflect We Lend, LLC’s views and assumptions as of the date of the Presentation regarding future events and performance. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are important factors that could cause We Lend, LLC’s actual results to differ materially from those indicated in these statements. We Lend, LLC’s confidential private placement memorandum. We Lend, LLC believes that these factors include, but are not limited to, those described in the "Risk Factors" section of the PPM.
An Investment In We Lend, LLC involves Risk, And Numerous Factors Could Cause The Actual Results, Performance, Or Achievements Of We Lend, LLC To Be Materially Different From Any Future Results, Performance, Or Achievements That May Be Expressed Or Implied By Statements And Information In This Presentation. Actual Results May Vary Materially From Those Described In This Presentation, Should One Or More Of These Risks Or Uncertainties Materialize, Or Should Underlying Assumptions Prove Incorrect.