The LYNK Capital family of funds provides a variety of options for smart investors who are looking to build wealth, gain exposure to real estate, and diversify away from the volatility of the stock market.
We currently operate three unique funds:
- LYNK Capital Mortgage Fund: A lending fund making short-term, first lien renovation and construction loans.
- LYNK Capital Income Fund: Ownership of stabilized, income-producing residential and commercial rental properties.
- LYNK Capital Opportunity Fund: Debt and equity investments in higher-yielding opportunistic real estate projects.
At LYNK Capital, we believe that investing in real estate is an important part of any balanced portfolio. We believe this so much that a substantial portion of our own money is invested beside other investors in our funds. To learn more about our funds, please click on the tabs below:
Mortgage Fund: Asset Class & Business Model
The LYNK Capital Mortgage Fund invests primarily in short-term loans made to borrowers who are building or renovating residential or mixed-use real estate. 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 project (typically 15 – 25%) 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.
Mortgage Fund Profile
The Mortgage Fund aims to provide consistent monthly income paired with the security of having first-lien security in real estate.
- Target returns: 8.0% - 12.0%
- Distributions: Paid monthly
- Security: First lien mortgages on 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 70%.
- 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.
- 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's Mortgage Fund 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.
Income Fund: Asset Class & Business Model
The LYNK Capital Income Fund invests primarily in income-producing residential and commercial properties, primarily in the Eastern United States.
Residential assets will consist of single-family and small multi-family projects, while commercial assets will consist primarily single-tenant, net-lease properties with tenants that are less sensitive to economic cycles and are unlikely to be replaced by e-commerce alternatives. Targeted industries include retail auto care and service stations, quick service and fast casual restaurants, convenience and dollar stores, and health care.
All properties will be leased or ready to be leased and commercial properties will be leased under NNN or NN lease terms.
Income Fund Profile
The Income Fund aims to provide ongoing income through the collection of rents from income-producing properties.
- Target returns: 6.0% - 9.0%
- Distributions: Paid quarterly
- Security: Direct ownership of income-producing properties
LYNK Capital’s Approach to Rental Properties
Owning income-producing rental properties can be an important part of any investment portfolio. The income received from rental properties is typically not correlated with stock-market performance, and a portfolio of rental properties may perform well in periods of low economic growth, as more households choose to rent.
Assets will primarily be evaluated used the following criteria:
- Cash Flow. All assets must exhibit the ability to return consistent cash flows from tenant rentals. Additionally, all assets must be suitable for use as long-term rentals with minimal renovations or improvements.
- Location. Assets will typically be located in primary or secondary markets.
- Lease Terms. For commercial properties, assets must be leased under NNN or NN lease terms.
The goal of the fund is to provide exposure to a lower-risk portfolio of stabilized income-producing properties. The primary income of the fund will be generated through the cash flows of the owned properties and not through capital appreciation. These investments are intended to perform during an economic downturn or contraction in the housing market. Additionally, in any housing contraction, the fund hopes to be well positioned to acquire income producing properties at a discounted value, either on the open market or from other LYNK investment funds.
Opportunity Fund: Asset Class & Business Model
The LYNK Capital Opportunity Fund invests in higher-yielding real estate projects, in both debt and equity structures. The majority of assets will be located in the Eastern United States.
Projects chosen for investment will typically either need ‘bridge’ financing or will be expected to produce returns upon the completion of certain improvements or entitlements.
While the marketplace for private renovation and construction loans has become more institutionalized in recent years, there is a large group of potential projects that remains under-served. These projects typically have characteristics such as:
- Limited cash flow or lack of liquid assets by the borrower
- Unique properties or short closing timeframes
- Large development or construction components
Opportunity Fund Profile
The Opportunity Fund aims to provide access to higher-yielding, higher-risk real estate deals in a variety of structures. Investments may be structured either as debt or equity.
- Target returns: 10% - 15%
- Distributions: Only upon project repayment
- Security: Secured debt or equity ownership
Assets will primarily be evaluated used the following criteria:
- Prospective value. The anticipated value of the property after the completion of any improvements or construction will be a primary factor in deal evaluation. The anticipated future value must meet the investment return profile of the fund while also ensuring that undue capital risk is not taken. When structuring investments as senior debt, the fund will target loan-to-value ratios (LTVs) of 65% or less.
- Experience of sponsor. The project sponsor (or borrower) must have demonstrated experience in the type of project being undertaken, with a track record of successful completion.
- Borrower/Sponsor Capacity. The financial capacity of the borrower or sponsor will be given less weight, as it is expected that the success and profitability of the project will be derived primarily from the improvement and sale of the property.
Projects targeted by the Opportunity fund will typically have anticipated timeframes of between one and five years, with returns realized primarily at project completion.
Securities offered by LYNK Capital, LLC, LYNK Capital Opportunity Fund, LLC, and LYNK Capital Income Fund, LLC (collectively, "LYNK") 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 these offerings. These offerings are 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 exemptions 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 these exemptions, these securities are subject to legal restrictions on transfer, and the LYNK funds are 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. None of LYNK Capital, LLC, LYNK Capital Opportunity Fund, LLC, nor LYNK Capital Income Fund, LLC are 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 any of the LYNK funds are subject to certain risks and uncertainties that could cause actual future results 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. The LYNK funds are not required to follow any standard methodology when presenting performance data and their performance may not be directly comparable to the performance of other similar funds. This website provides a limited summary of the LYNK funds 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 each LYNK fund's Private Placement Memorandum prior to investing.