LYNK Capital, LLC is a private lending fund that offers consistent,
attractive returns to smart investors who are looking to build wealth, gain exposure to real
estate assets, and diversify away from the volatility of the stock market.
At LYNK, we believe that investing in first-lien real estate mortgages is an attractive asset class that can be an important part of any well-diversified portfolio. We believe this so much that a substantial portion of our own money is invested beside other investors in LYNK. To learn more about why we this is an attractive investment, please continue reading the following sections about LYNK’s business model. If you’re interested in investing, have questions, or would like to further discuss our business, please contact us.
Why Invest in Private Mortgages?
Nearly all investment advisers recommend that a diversified portfolio include exposure to real estate investments. Owning real estate directly, though, can be a challenge for investors. Owing individual properties – whether as rental units or for renovation and sale – requires time and specialized experience, concentrates risk in a few individual assets, and exposes the investor’s capital to significant risk if the property values fall.
Investing in mortgages – being a lender to owners of real estate – offers an alternative form of real estate exposure with certain benefits:
- Lower Capital Risk. Borrowers are required to bring equity into the loan (typically 20 – 40%) and take the risk of first loss in the event that the property sells for less than expected. This results in less capital risk for the lender compared to property ownership.
- Consistent Returns. Investor returns are paid directly by the borrower, through monthly interest payments, and aren’t reliant upon property price appreciation.
- Security. In the event of a default, the lender can foreclose and assume ownership of the underlying real estate.
LYNK Capital’s Approach to Mortgage Lending
At LYNK Capital, we believe that, when done properly, mortgage lending can be an attractive and secure investment. To this end, we utilize the following principals when underwriting loans:
- Conservative Loan-To-Value Limits. Loan-To-Value (LTV) simply means the amount of the loan divided by the value of the property. Lower LTVs mean lower risk, as there is greater collateral value securing the loan. While Wall Street loans of the mid-2000s were often done at 100% LTV and banks still routinely make 95% LTV loans on owner-occupied properties today, LYNK makes loans where the LTV at completion of any improvements will be no greater than 75%. Overall, we target a portfolio LTV of no more than 65%.
- Short-Term Loans. Long-term loans can be risky, as interest rates and market conditions can vary greatly over time. At LYNK, we focus on short-term loans – typically between 6 and 18 months in duration. By focusing on shorter-term loans, we can underwrite loans to a specific set of market conditions and quickly adapt when things change.
- Limited Geographic Focus. LYNK currently lends in approximately ten states. We chose these markets because of attractive demographic factors (from strong employment in the mid-Atlantic region to robust population growth in the Southeast), but also because of our familiarity with these markets. With offices in Maryland, North Carolina, and Florida, we live and work in many of the markets in which we lend.
- Focus on Repayment. For each loan, we focus intently on how our funds will be repaid, even if the borrower defaults. This includes an analysis of the borrower’s experience and capacity to complete the project, the strength of the renovation or improvement plan, and overall market conditions. As a backup, if we do not believe that LYNK can take over a project and complete it successfully, we don’t do the loan.
Construction & Renovation Lending
A primary focus of LYNK Capital is the origination of small-balance renovation and construction loans on residential properties. We believe this is an attractive market because:
- Prior to the mid-2000s, builders and property developers were traditionally served by local community banks; however, as a result of increasing regulations and oversight, these banks have reduced their levels of lending and have generally made obtaining renovation and construction loans a more difficult and time-consuming process. As a result, many small property developers are under-served by the traditional banking system and have a strong need for financing from private lenders – meaning that lenders like LYNK Capital can make good quality loans at higher rates than those offered by banks.
- While loans from banks are difficult and cumbersome to obtain, there are always properties that need to be renovated; additionally, many areas served by LYNK simply have an abundance of older properties that can be increased in value and desirability with moderate renovations.
- Beyond the market conditions noted above, renovation and construction lending is inherently short-term in nature, meaning that LYNK can help reduce risks related to interest rates and market conditions by focusing on lending to projects with foreseeable completion and repayment dates.
Transparency is an important aspect of any pooled investment, from mutual funds to bonds to private funds. Simply put, it’s important for you to know what type of assets are securing your investment and that there are no surprises later on. At LYNK, our goal is to provide complete transparency and, as a result, we’ve developed a proprietary investor portal that connects our investors with important information such as:
- Detailed loan summaries
- Payment histories
- Project updates and photos
- Monthly financial reports
We’re proud of our investor portal and are always happy to provide tours to prospective investors, so please contact us to set up a demo.
Securities offered by LYNK Capital, LLC involve a high degree of risk and should be considered only by sophisticated investors who can bear the risk of the loss of their entire investment. These securities have not been reviewed or approved by United States Securities and Exchange Commission or by any state securities agency, nor have those authorities passed upon the accuracy or adequacy of this website or any other information furnished to prospective investors in connection with this offering. This offering is open only to “accredited investors” as defined in Rule 501 of Regulation D of the Securities Act of 1933. These securities are being offered under an exemption from the registration requirements of the Securities Act of 1933 and have not been registered with the United States Securities and Exchange Commission or any state securities agency. As a result of this exemption, these securities are subject to legal restrictions on transfer, and LYNK Capital, LLC is not required to comply with certain disclosure requirements that apply to securities that have been registered under the Securities Act. Prospective investors should not assume that they will be able to liquidate or resell these securities and should be aware that no public market exists for doing so. LYNK Capital, LLC is not registered as an investment company under the Investment Company Act of 1940, and investors are not subject to the protections offered by this Act. Additionally, the Fund Manager, Securities Capital Partners, LLC, is not registered as an investment adviser under the Investment Advisers Act of 1940. This material contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements regarding future events and/or the future performance of the Fund are subject to certain risks and uncertainties that could cause actual events or the actual future results of LYNK Capital, LLC to differ materially from such forward-looking statements. Any historical performance data contained herein represents past performance and does not guarantee future results; current and future performance may be different than the performance data presented. LYNK Capital, LLC is not required to follow any standard methodology when presenting performance data and its performance may not be directly comparable to the performance of other similar funds. This website provides a limited summary of LYNK Capital, LLC and is not intended to be a comprehensive overview of its business, operations, risks, or condition, nor is this website intended to represent balanced investment advice. Interested investors must obtain and carefully read LYNK Capital, LLC’s Private Placement Memorandum prior to investing.
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