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One Call Capital Fund…
Welcome to the One Call Capital Fund, an investment opportunity designed for accredited investors seeking a robust return on their investment. As a 506(c) fund, we operate under Rule 506(c) of Regulation D under the U.S. Securities Act of 1933, enabling us to openly advertise our securities and connect with a wide range of accredited investors.
At One Call Capital, our portfolio comprises three main investment strategies:
- Land Loans: We leverage our real estate expertise to provide financing for land acquisitions, helping investors unlock the value of raw land or undeveloped properties and tap into the potential for future growth and profitability.
- Transactional Funding: Our short-term financing solutions empower investors to seize time-sensitive opportunities in the real estate market, enabling quick property purchases and sales without the need for traditional financing.
- Construction Loans: We offer specialized construction loan offerings, facilitating investors to undertake construction projects aimed at enhancing properties for resale or long-term gains.
We’re proud to target an annual return of 12%, and investors can choose to receive monthly dividends or reinvest their dividends into the fund for compounding interest. At One Call Capital, we believe in the power of diverse real estate investments and we’re excited to offer you this unique opportunity to grow your wealth.
What is a 506(c) Fund?
A 506(c) fund refers to an investment fund that operates under Rule 506(c) of Regulation D under the U.S. Securities Act of 1933. This rule provides a “safe harbor” for the private offering exemption, allowing companies to raise an unlimited amount of capital from accredited investors through general solicitation and advertising.
In simpler terms, a 506(c) fund can openly advertise its securities to accredited investors, contrasting with many other types of investment funds that are not allowed to advertise to the general public. It’s important to note that while 506(c) funds can publicly solicit and advertise, they are still considered private offerings, not public offerings.
History & Origin of the 506(c) Fund
The 506(c) exemption was established by the Jumpstart Our Business Startups (JOBS) Act in 2012. The JOBS Act was designed to encourage the funding of small businesses in the United States by easing various securities regulations. Prior to the enactment of the JOBS Act, private companies were prohibited from advertising investment opportunities to the general public under Rule 506 of Regulation D. The introduction of Rule 506(c) represented a significant shift, allowing companies to use general solicitation and advertising to reach a broader range of potential investors.
However, with the added flexibility of general solicitation, Rule 506(c) also introduced stricter requirements for verifying that investors are accredited. Under this rule, companies must take “reasonable steps” to verify that all purchasers of securities are accredited investors, which typically involves reviewing income and net worth documentation. It’s important to note that while Rule 506(c) has expanded opportunities for companies to raise capital, it has also introduced new complexities and responsibilities. As such, it’s essential for both companies and investors to fully understand the rule and its implications.
Why the one call capital Fund?
When it comes to investing, we believe the One Call Capital Fund stands apart. Our expertise in real estate investment combined with the unique advantages of a 506(c) fund allows us to offer an investment opportunity that we believe is truly exceptional.
Our fund offers diversified exposure to real estate through land loans, transactional funding, and construction loans, each carefully crafted to leverage lucrative opportunities in the property market.
But don’t just take our word for it. Let’s consider how investing in a 506(c) fund like ours stacks up against more traditional investments:
Historically, the stock market has offered an average annual return of around 10%. However, this return can fluctuate significantly from year to year due to market volatility.
Stock investing carries a risk of losing some or all of your investment. The value of a stock can fluctuate widely due to factors like the company’s performance, general market conditions, and economic factors. There’s also a risk that a company could go bankrupt and shareholders could lose their entire investment.
Bonds are generally considered less risky than stocks, but as a trade-off, their returns are also lower. Over the past several decades, long-term government bonds have averaged annual returns around 5-6%.
While bonds are generally considered less risky than stocks, they are not without risk. The issuer of a bond could default on their payment obligations, and there’s also interest rate risk — if interest rates rise, the price of existing bonds falls. Furthermore, inflation can erode the purchasing power of the fixed interest payments that bonds provide.
Whole Life Insurance
Whole life insurance policies are primarily designed for financial protection, not investment. The cash value portion of a whole life policy can provide a return, but it’s generally modest, often in the range of 2-4% per year.
The risks associated with whole life insurance primarily relate to the insurance company’s ability to meet its obligations. If the insurance company runs into financial trouble, it may not be able to pay the policy’s cash value or death benefit. Also, whole life insurance policies can be complex, with fees and charges that can reduce the policy’s value. Lastly, if you surrender the policy early, you could get back less than you’ve paid in, and you may face substantial surrender charges.
Targeted / Average Annual ROI
|One Call Capital Fund – 506(c)
|Real estate market volatility, project-specific issues such as construction delays or unforeseen expenses, potential difficulty in selling or renting properties, potential loss of some or all of your investment
|~ 10 %
|Market volatility, company-specific risks, potential for a company to go bankrupt, potential loss of some or all of your investment
|Risk of issuer default, interest rate risk, inflation risk, potential loss of some or all of your investment.
|Whole Life Insurance
|Risk related to the insurance company’s ability to meet its obligations, fees and charges that can reduce the policy’s value, potential for substantial surrender charges if the policy is surrendered early.
|*** All data presented is based off of historical averages and do not relect any specific stock, bond, or whole life insurance poloicy.
As you can see, the One Call Capital Fund offers a competitive target annual return compared to these traditional investment options. By choosing our fund, you’re choosing a dynamic, growth-focused investment that has the potential to outpace stocks, bonds, and whole life insurance in terms of annual return.
The first step towards investing in a 506(c) fund is becoming an accredited investor. This requires a net worth exceeding $1 million (either individually or jointly with a spouse), or an income over $200,000 in each of the two most recent years (or $300,000 combined with a spouse). The investor must have the expectation of reaching the same income level in the current year.
Risk Tolerance Agrement
Potential investors should understand the risks involved in a 506(c) fund. These risks include real estate market volatility, project-specific issues such as construction delays or unforeseen expenses, and the potential loss of some or all of your investment. It is crucial to have a risk tolerance that aligns with these potential challenges.
Once accreditation is confirmed and the investor understands the risks, the final step is to decide to invest. This includes completing any required paperwork, providing investment capital, and maintaining open communication with the fund’s management team about any questions or concerns.
Frequent Asked Questions
Are there tax benefits or cost segregation with your fund?
Investments in funds like the One Call Capital Fund can provide certain tax advantages, depending on the nature of the investments and the structure of the fund. Some of these potential benefits could include:
- Capital Gains: Profits from the sale of properties within the fund may be subject to capital gains tax rates, which can be lower than ordinary income tax rates.
- Depreciation: If the fund owns real estate, it may be able to depreciate the property over time, which can provide tax deductions.
- Cost Segregation: This is a strategic tax planning tool that allows companies and individuals who have constructed, purchased, expanded, or remodeled any kind of real estate to increase cash flow by accelerating depreciation deductions and deferring federal and state income taxes. If the fund uses cost segregation, it may be able to accelerate depreciation on certain aspects of its properties, providing additional tax deductions.
However, the primary investment type for One Call Capital is a debt fund, which does not allow for depreciation. We have the option of investing in physical real estate, which is not our primary target for this fund. The availability and extent of these benefits can vary based on many factors, including the investor’s personal tax situation and the specific activities of the fund. Tax laws are also subject to change, and the information I provide may no longer be accurate or applicable
Does the fund have stated criteria of what can & cant be invested in?
Yes, One Call Capital’s stated investment objective is to invest in real estate assets and will focus on debt that is secured by real estate. The full investment criteria and policies are outlined in the fund’s offering documents, or prospectus, which detail the types of investments the fund will target, along with any restrictions or limitations on the fund’s investments.
For example, the One Call Capital Fund has specified that its portfolio will be made up of land loans, transactional funding, and construction loans. This means that the fund is primarily focused on these types of real estate investment opportunities.
It’s crucial to remember that the management of the fund determines its investment policies, and those policies are subject to change over time—although significant changes typically require investor approval. Any potential investor should carefully review the fund’s offering documents to understand its investment policies before investing.
What is the fund's expected lifecycle?
The lifecycle of the fund is 10 years, with an option to extend at the investment manager’s discretion. However, investors are only committed for one year at a time.
Are investments spread across many clients or are investors matched with specific clients?
The One Call Capital Fund’s investments are combined and spread across many opportunities rather than matched with specific clients. The fund uses the collected capital to invest in its targeted asset classes—in your case, land loans, transactional funding, and construction loans.
By pooling resources together, the fund can access investment opportunities that individual investors might not be able to afford or access on their own. It also allows for greater diversification, as the fund’s investments are spread across a variety of projects, reducing the potential risk tied to any single investment.
The profits (or losses) from the fund’s investments are then distributed to the fund’s investors in proportion to their shares in the fund.
Are the GP's actively investing in the One Call Capital Fund?
Yes, the GPs of One Call Capital Fund are also LP investors in the fund.. They are subject to the same screening criteria as all investors.
Does the PPM limit LPs & GPs from receiving loans from the fund?
The Private Placement Memorandum (PPM) outlines the rules and restrictions regarding fund operations, including whether General Partners (GPs) can apply for loans on behalf of the fund .
One Call Capital’s PPM does allow the GPs to apply for loans. However, the current investment strategy is to avoid leverage in the fund, and instead, the Investment Manager’s prefer to seek capital directly from the Limited Partners (LP).
What happens if the GPs die?
The procedures for handling the death of a General Partner (GP) are typically outlined in the fund’s operating agreement or other governing documents.
If a GP passes away, the remaining GPs will continue to manage the fund. If all the GPs pass away a dissolution event would be triggered, meaning that the fund would be wound down and the assets distributed back to the LPs.
It’s also worth noting that key person insurance is in place for the GPs, which can provide financial protection to the fund in the event of a GP’s death.
Investors should carefully review a fund’s governing documents and consult with a financial advisor or legal counsel to understand the procedures and implications of a GP’s death.
It’s also worth noting that many funds carry key person insurance on their GPs, which can provide financial protection to the fund in the event of a GP’s death.
Investors should carefully review a fund’s governing documents and consult with a financial advisor or legal counsel to understand the procedures and implications of a GP’s death.
When should the K-1s come out?
K-1s will be issued in the first quarter following the fiscal tax year by the fund manager.
What is the minimum investment time, how/when do you cash out?
The minimum investment time (also known as the lock-up period) and the process for cashing out (or redeeming) are outlined in the fund’s offering documents..
- The Minimum Investment Time: 1 year.
- This is the period during which investors are not allowed to withdraw their capital from the fund. The lock-up period allows the fund to invest in longer-term opportunities without worrying about returning capital to investors prematurely.
- Cashing Out: After the lock-up period, there will be an annual option to renew or cash out of the fund. Investors can choose to redeem their shares and cash out their investment or renew their subscription for another year. This process is managed via the fund’s online portal.
How often are payouts?
Distributios to investors are conducted on a quarterly basis.
What is your track record in underwriting? What happens if a default does occur?
To date, the principals have issued over 50 loans worth over several million dollars, and all payouts to investors have been made on schedule. The fund managers had to work out a payout schedule with one borrower and perform one foreclosure. The borrower in question passed away, and the heirs were not able to make timely payments.
Is there a way to participate in profits?
Yes, the structure of One Call Capital shares the profits of the fund 50/50 between the GP and LP 50/50 after the preferred return is paid to the LPs. The details of the fund’s profit sharing are explained in the offering documents.
Can I invest my own solo 401(k) or IRA Funds?
Yes, investors can use funds from a 401(k) or Individual Retirement Account (IRA) to invest in the One Call Capital Fund. However, there are some specific rules and considerations to keep in mind:
- Self-Directed IRAs: Typically, this is done through a self-directed IRA, which is a type of IRA that allows for a wider range of investment options, including private funds. A custodian who permits such investments would need to be in charge of managing the IRA. Examples are Equity Trust Company or Quest Trust Company.
- 401(k) Rollovers: If your money is in a 401(k), you may need to roll it over into an IRA in order to invest in a private fund. This can often be done without incurring taxes or penalties, but the rules can be complex and there may be restrictions depending on your specific 401(k) plan.
- Accredited Investor Status: Remember that investments in 506(c) funds are generally limited to accredited investors, which means you’ll need to meet certain income or net worth requirements. The funds in your IRA or 401(k) can count towards these requirements, but only if they’re in a self-directed account where you have direct control over the investments.
- Risks and Considerations: Investing retirement funds in a private fund can offer potential tax advantages and diversification benefits. However, these investments can also be riskier and less liquid than traditional retirement investments, so it’s important to carefully consider your overall investment strategy and risk tolerance.
As always, if you’re considering using retirement funds to invest in a private fund, it’s a good idea to consult with a financial advisor or tax professional to understand the potential benefits, risks, and tax implications for your personal situation.
How will you handle idle cash in the LP account?
Idle cash will remain in sweeps accounts and distributed each night via a service that keeps the maximum amount of cash within the $250K FDIC maximum.
Does the GP handle the foreclosure in the event of a foreclosure?
The General Partner (GP) is responsible for the management of the fund, including handling situations like foreclosures. If a borrower defaults on their loan, the GP would handle the foreclosure process on behalf of the fund.
This process includes:
- Initiating the foreclosure process in accordance with the terms of the loan agreement and local and federal laws.
- Managing any legal proceedings related to the foreclosure.
- Overseeing the sale or disposition of the property once it has been foreclosed upon.
- Distributing any proceeds from the sale of the property back into the fund.
How does the GP get paid?
The General Partner (GP) gets compensated through a combination of management fees and performance fees (often called “carried interest”). The specifics of the GP’s compensation are outlined in the fund’s offering documents. Here’s a general overview:
- Management Fees: This is typically a fixed percentage of the fund’s total assets or invested capital and is used to cover the GP’s overhead and operating expenses. This fee is usually paid annually and ranges between 1% and 2% per year, though the rate can vary depending on the fund and its strategy.
- Performance Fees or Carried Interest: In addition to the management fee, the GP often receives a share of the fund’s profits, known as “carried interest.” This is typically a significant percentage of the fund’s profits and is meant to incentivize the GP to maximize the fund’s performance. The specifics can vary, and there may be certain hurdles or high water marks that must be met before the GP can receive carried interest.
What is the minimum experience of the borrower?
The underwriting criteria of the fund require that the borrowers have performed at least 10 successful real estate transactions.
How do you check if an investor is accredited?
Under Rule 506(c) of Regulation D, issuers like a 506(c) fund are required to take “reasonable steps” to verify that investors are accredited. This is a key distinction from Rule 506(b) offerings, where self-certification by the investor is sufficient.
Under 506(c), self-certification is not adequate; the issuer must verify the investor’s accredited status. This verification process can be done in several ways:
- Income Verification: This involves reviewing IRS forms that report income, including Form W-2, Form 1099, Schedule K-1, and a tax return. The investor should provide these forms for the two most recent years, along with a written representation that they have a reasonable expectation of reaching the income level required to qualify as an accredited investor during the current year.
- Net Worth Verification: This involves reviewing bank statements, brokerage statements, certificates of deposit, tax assessments, and appraisal reports issued by independent third parties to verify the investor’s assets, and a consumer report from at least one nationwide consumer reporting agency to verify liabilities. The investor also needs to provide a written representation that all liabilities necessary to make a determination of net worth have been disclosed.
- Third-Party Confirmation: A fund can also verify an investor’s accredited status through confirmation from a registered broker-dealer, an SEC-registered investment adviser, a licensed attorney, or a certified public accountant that they have taken reasonable steps within the last three months to verify the investor’s accredited status.
- Existing Investor Verification: If an investor who invested in a Rule 506(b) offering as an accredited investor prior to September 23, 2013 remains an investor (even if not purchasing additional securities in the issuer’s Rule 506(c) offering), the issuer may be able to rely on a certification by the investor at the time of the sale of securities under Rule 506(c) that they qualify as an accredited investor.
The process is handled within the investor portal.
Are LPs paid 365 days out of the year?
Yes, LPs are paid preferred returns based on a calendar year. Payouts are made on a quarterly basis. Once capital is called then the time begins.
Why just these 3 loan products?
The One Call Capital Fund focuses on three primary types of investments: Land Loans, Transactional Funding, and Construction Loans. This strategic decision is grounded in the fund’s commitment to risk management and maximizing profits for investors and borrowers alike.
- Expertise: Our team has extensive experience and a deep understanding of these specific areas within the real estate market. This expertise allows us to thoroughly evaluate opportunities and risks associated with each investment, ensuring that we make informed decisions.
- Risk Management: Specializing in these three areas allows us to minimize risk. Our team knows what to look for in these particular investments and how to navigate potential challenges. We’re able to identify red flags early and take steps to mitigate risks, ensuring the preservation of the fund’s capital.
- Profit Maximization: Our targeted focus also aids in maximizing profits. By concentrating on what we know best, we’re able to identify the most promising opportunities and negotiate the best terms, resulting in higher returns for both our investors and borrowers.
- Market Dynamics: We believe these investment types are well-positioned to take advantage of current and future market dynamics. With our knowledge and experience, we’re able to leverage market trends and shifts in these particular areas, resulting in enhanced performance of the fund.
By focusing on these three types of investments, the One Call Capital Fund aims to deliver consistent, robust returns while effectively managing risk. We believe that this targeted approach, combined with our team’s expertise, positions us and our investors for long-term success.
Can LP's take out quarterly or can they just leave the interest in the fund?
Yes LPs have the option of receiving the distributions quarterly or reinvesting their payments into the fund. This selection is available within the fund’s portal.
Are all your loans in 1st position?
Our primary investment strategy is to offer loans to borrowers. These loans are issued to operating companies that have first-position liens secured against the property.