Private Money Investor Frequently Asked Questions

Our note program originated in 2017.

Yes! While our notes have already been vetted by our highly trained team here at Investor Loan Source, we encourage our investors to do their own due diligence. Our underwriting is made available to you for review upon request.

To participate in our note sales program with our buyback promise you must be an Accredited Investor as defined by the SEC under Rule 501. For most cases, an Accredited Investor is an individual whose income is over $200,000/year (for single persons) or $300,000/year (for married couples) or has a net worth over $1,000,000 not including equity in their principal residence. Non-Accredited investors must be considered to be a “sophisticated investor” as defined by the SEC to buy our long-term notes without a buyback agreement and will be approved on an individual basis by management. The commission defines a sophisticated investor as an individual or institution that “must have sufficient knowledge and experience in financial and business matters to make them capable of evaluating the merits and risks of the prospective investment.”

Absolutely! We welcome individual investors, self-directed IRA investors, LLCs, Trusts, partnerships, and more.

The minimum investment is 90% of the unpaid principal balance (UPB) of that particular note. If you are an unaccredited individual purchasing a note with no buyback agreement, you will be purchasing the note at 100% of the UPB.

Yes, we charge $200 for document preparation and recording. If you are investing with a structured account, such as an IRA, we will discount that to our “in house” cost of $135.

You are locked into your investment until the note pays off or we buy it back per the buyback agreement terms. If you purchase a long-term note with a buyback agreement we will offer to buy it back upon written request from the investor anytime after 2 years.

ILS generally originates notes at 70% UPB providing a 30% equity cushion. This means the value of the note you are buying is appraised at 30% more than what you are paying to buy the note. Another way we mitigate risk is by offering a buy back agreement to our accredited individuals. This agreement states that if the note sits in default for a specified time period, we will purchase your interest in the note at UPB with interest through the payoff date! We also retain around a 10% ownership in each note we sell proving that we too have “skin in the game.”

Since our borrowers pay on their notes monthly, you should expect to receive your portion of interest via ACH on a monthly basis.

Monthly statements are sent to our investors straight from our servicing department. Feel free to call our note team anytime regarding additional specifics.

No, since our borrowers are using an entity for their loan we are not required to do so. However, if you would like to receive a year end statement showing interest earned for the year please reach out to us and we will be happy to provide one.

If you have any additional questions, please call 979-541-1280 or email us at invest@ils.cash. We'll be happy to assist you.

The general partners of the fund have been managing note funds since 2014. The ILS Growth Fund I LP (fka ILS Short Term Fund I LP) and ILS Income Fund I LP (fka ILS Long Term Fund I LP) were created in 2018 to allow investors to take advantage of the returns note funds offer.

The minimum investment in both the ILS Growth Fund I LP and ILS Income Fund I LP is $50,000. Subsequent investments are also allowed at any time, at a minimum of $5,000.00

The initial lock-up period for both funds is one year. After one year we provide best efforts liquidity allowing investors to redeem their units with a 90-day written notice.

Quarterly updates are sent out to all our investors. This details our thoughts on the market, as well as any potential changes in strategy being needed for the foreseeable future. You will also have access to our partner portal, allowing you to view your statements anytime.

Yes, this fund is open-ended, also known as an evergreen fund.

Yes, investing in the private fund is completely passive. When investing in a private fund, you are leveraging our management company’s experience in this business and participate in a diversified portfolio. Investors receive their monthly return by ACH wire or have the option of having their distribution reinvested in additional units in the fund.

If you invest, you become a part owner of the fund versus a specific note. Therefore, your capital is diversified across all the notes in the portfolio.

Yes, you must be an accredited investor to invest in both the Growth Fund and Income Fund as defined by the SEC under Rule 501.

Yes, our funds allow investment through qualified retirement money. This must be done through a self-directed IRA or 401K. If you don’t yet have a self-directed account, we can make introductions to several custodians that we have worked with.

No, our funds do not generate UBIT but may, on rare occasions, trigger UDFI tax. Please consult your IRA custodian or tax specialist.

Investors should consult with their trusted accountants and attorneys to ensure they understand all tax implications prior to investing. We will provide each investor with a K-1 form for tax purposes.

If you have any additional questions, please call 979-541-1280 or email us at invest@ils.cash. We'll be happy to assist you.