What does it cost to list a project on your platform?
Nothing! We work with real estate developers and hard money lenders who want to get more deals funded quickly. The borrower only pays for an appraisal, closing costs, origination points, and monthly interest. We don’t charge hidden fees, junk fees or transactions fees either.
What criteria is Pure Capital Funding looking for when posting projects on their platform?
Our projects are evaluated on a case-by-case basis and in addition to the criteria below, Pure Capital Funding Executives, and friends and family regularly invest personally in the projects. Accordingly, we fund and list only the most promising projects after performing full due diligence and partnership with 3rd parties.
Our current guidelines for a debt purchase or refinance investments are:
Minimum loan amount of $100,00
LTV (Loan toValue) less than 80%
Minimum downpayment of 20%
ARV (After Renovated Value) less than 60%
Loan duration 1-24 months
We will finance 100% of DCC (Direct Construction Costs)
No prepayment penalties
We also ask for personal guarantees. Some of the guidelines listed above are negotiable, depending upon the strength of the project. If a property can be purchased significantly below its market value or if the Developer offers additional security components, we may consider a higher LTV or ARV.
Does Pure Capital Funding accept projects in all states? Outside the United States?
Currently, Pure Capital Funding accepts projects only from the state of Michigan However, we are actively pursuing ways to accept projects from every state in the country. We do not accept projects from outside of the United States at this time.
What type of information do I need to provide to Pure Capital Funding?
The List of items needed to underwrite a loan includes:
Credit Report (we look at scores, but we’re more interested in what the report says.)
Proof of Funds (down payment, closing costs,,carrying costs, etc.)
Inspection Report of the property, if available
List of Comparable Sales (CMA, BPO, MLS listings, if available)
Purchase Contract, if a purchase
Construction Budget Estimate & Timeframe
Contractor Information (License #, Insurance, Bond)
Payoff Statement, if a refinance
Borrower’s Attorney or Escrow Company information
Articles of Incorporation
Developer Biography (to be posted on the website)
Property Description/Plans (to be posted on the website)
General Liability Insurance ($2 million aggregate)
Builder’s Risk Policy
Builders License Number
Any other Insurance applicable (Flood, Wind, etc.)
We also complete an independent background check.
Why should I choose to use Pure Capital over a traditional way of funding my projects?
At Pure Capital Funding we are able to complete funding in as little as 30 days, with short term rates as low as 9.99% and four origination points. As an online crowd funding service with thousands of accredited investors, we have the ability to form creative capital structures that will work for your specific plans, covering both ICC (indirect construction cost) and DDC (Direct Construction Costs). We are flexible in trying to find the best loan product that fits a developer’s needs. Also, we take great care and pride in promoting the developer on our website, to our investors and giving the developer vast exposure to a large group of people who believe in the project, and want to see it succeed. This is a new way of receiving funding, powered by e-commerce and technology in our connected and social world. Developers receive the benefits of all these forces combined, plus great customer service, and a team that is dedicated to ensuring the developer’s ultimate success.
What types of properties do you lend on?
Typically, we lend on residential Flips, 1-4 family properties, small mixed use, aprtment conversion, Loft conversion and small commercial, with a strong emphasis on projects in the City Of Detroit. As we grow in the future, we will be looking at subdivisions and other larger projects.
How is crowdfunding at present time?
The crowdfunding industry has grown 1000% in the past 5 years
It is set to grow 95% in 2015
Crowdfunding contributes over $500 billion in funding per year
Crowdfunding generates over $3.2 trillion in economic value per year
How is crowdfunding changing real estate investing?
Low time commitment, risk, and effort- With crowd funding, investors do not have to personally manage the property, and the investment minimums are lower than that of traditional real estate investing.
Achieves greater diversification- Because amounts for investment minimums are lower through crowdfunding, investors are able to allocate funds across multiple properties.
Provides transparency and accessibility- Crowdfunding platforms allow investors to access and view all of the information regarding the investment project as soon as they are made available. Investors can monitor their investments online whenever they choose.
Convenience- Investors are able to make investments from the comfort of their home via laptop, tablet, or mobile phone.
Would like you more information on about us? borrowing? Investing? Crowdfunding Real estate? Just drop us a note......
Q Can anyone invest in PureCapitalFunding?
A. Yes, any Michigan resident can invest in any Michigan project. Governor Snyder signed into law House Bill 4996 of 2013 on December 26, 2013 (2013 PA 264), with an effective date of December 30, 2013, which allows Michigan corporations and limited liability companies to sell an interest in its business to non-accredited investors without having to register these interests as securities. The new law provides a streamlined procedure to allow Michigan investors to invest in Michigan small businesses; in turn, allowing these businesses to raise capital.
What is an Acreddited investor?
An accredited investor, makes up less than 1% of Michigan's population in the context of a natural person, includes anyone who:
earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).
What is an non-accredited investor?
Everybody else, the other 99%!. This means that ANYBODY can invest in real estate deals that were once only availble to the wealthiest among us. Now you can earn returns on your investments from 9% - 18%
What am I investing in?
When you invest in a Pure Capital Funding offering, you are investing in a borrower payment dependent note, a promissory note in which the investor receives a stated interest rate for a stated term that is dependent on payment of the underlying loan between you and the property developer. The BPDN is a contract between the investor and the borrower. The investor does not own the underlying property and his/her name is not on the property title; Pure Capital Funding event (investors) generally secures a first lien position (mortgage) on the underlying property.
What are Pure Capital Funding Interest rates?
Interest rates differ for each loan and can range from 9% to 18%. Because each loan is unique, the interest rate is determined based on many factors. However, because our loans are for short-term real estate rehabilitation projects, they generally carry higher interest rates than other debt instruments.
Am I charged a fee as an investor?
No, No fees, no hidden cost.
Can I get my principal back at any time?
At this time, your principal (the amount you initially invested) will be paid back at the end of loan term or when the borrower repays the loan, whichever is sooner. Your principal investment amount is not liquid.
How are you able to offer such high rates?
Pure Capital Funding offers short-term loans to real estate developers for real estate projects for refinance, property rehabilitation, bridge loans, and short-term purchases. Short-term loans tend to command higher rates of return. Private money loans, which may be used for real estate rehabilitation projects, command higher interest rates than traditional lending due to the inherent risk of the project. Such risks may include, but are not limited to, downward trends in the local real estate market significant enough to remove a profit motive for the developer, non-completion of the project, or catastrophe or disaster that destroys the property. On the other hand, these risks are often mitigated by careful due diligence, insurance, and other mechanisms.
Is there an investment minimum?
Yes. The minimum investment is currently $500 per project.
What is the maximuim investment per project?
The maximum investment per project is $10,000
Are these investments risky?
Yes. Similar to investing in the stock market, there is no guarantee when investing in real estate. The real estate market has economic cycles and it is difficult to know how and when economic conditions will change. We highly encourage investors to review the due diligence of each deal as well as the accompanying investor loan package, which includes an investor agreement, borrower payment dependent note, and a private placement memorandum detailing risks of the company and the accompanying real estate project.
How does Pure Capital Funding handle the signature of investor documents?
When the investment is published, you are able to review the investor loan documents. All signatures are executed electronically with a fully executed electronic version both emailed to you and accessible via your account’s investor dashboard
What Information is available about each loan and borrower?
Pure Capital Funding is committed to providing detailed due diligence on every loan to every investor. When reviewing a loan, you can scroll through general information about the property and the business plan for the use of funds, as well as the appraisal, comparable data sets, purchase contracts, and other information. We also provide detailed information about the neighborhood and surrounding area, full financial data, a risk profile, and a project timeline. We provide a background and profile on every borrower, along with an FAQ for investors’ questions. We strive to provide the utmost in transparency, by sharing due diligence, documents and data to help a potential investor make an informed decision. However, we regret to inform investors that although Pure Capital Funding does review a guarantor’s credit report during the underwriting process, we do not share this piece of information publicly due to our commitment to financial privacy and compliance with the Fair Credit Reporting Act and Gramm-Leach-Bliley Act.
Is there risk in investing in real estate?
There is an inherent risk in any investment and real estate is no different. When investing in a property, there is a risk that the property may decrease in value. Real estate has its economic cycles that are difficult to predict.
What is a self-directed Individual Retirement Account (self-directed IRA)?
A self-directed Individual Retirement Account is one in which the account owner picks his or her own investments. Once the account owners have found an investment, the custodian will take the steps necessary to acquire it. Investments are not limited to traditional stocks, bonds or mutual funds, as our account owners may invest in real estate, private companies, promissory notes, precious metals and much, much more.