DMAC CAP FUND I - Hard Money Mortgage Fund
Hard Money Bridge Fund.
Hard Money Bridge Funding - Multifamily and Residential
Principal Investment Objectives
The Fund’s objectives with respect to acquiring Fund Assets are:
• To effectively deploy the proceeds of this Offering in well qualified Fund Assets;
• To distribute a monthly Preferred Return of 6% (annualized);
• To provide Members with an overall aggregated annual return of 10-12%; and
• To ultimately provide Members with a return of 100% of their Capital contributions.
No assurance can be given that these objectives will be attained or that the Fund’s capital will not decrease.
The Fund will pursue its objectives by originating and acquiring loans secured by real property located primarily in Texas, (the “Mortgage Loans”), but may allow property to be secured in additional markets nationwide, in the sole discretion of the Manager. Loans will be originated by the Manager and closed by the Fund, or the Manager may close loans and then sell them to the Fund on market terms. The Fund’s strategy is to pursue opportunities to make hard money bridge purchase and refinance loans for income producing multifamily commercial real estate properties, and some non-owner occupied residential properties.
WE ARE PROVIDING A SECURE, HASSLE FREE AND PREDICTABLE STREAM OF INCOME FOR OUR INVESTORS! PAID OUT MONTHLY
|Form of Security||
30/70 Waterfall Participation
DMAC Capital Funding Management
About DMAC Capital Funding, LLC is a Real Estate investment company that buys and invest in income producing assets, such as origination of hard money bridge loans, multifamily ground up or existing assets. Residential development. The company is ran by seasoned real estate professionals with a combined 50 years of experience in Development, construction, sales, investing and finance. Begining with the President Danny Mckinney who has over 30 years.
Daniel Mckinney, J.D.
• Mckinney has been an entrepreneur for over 30 years in the area of commercial and residential real estate sales, finance, construction and development. Mckinney has started and successfully ran several businesses. In 1996 to present, Mckinney was the founder, President of McKinney Real Estate & Investment Co, where he is the Broker/Owner and managed sales team of agents that listed and/or sold over 350 million in residential and commercial real estate over the last 26 years. Daniel has personally bought over 20 million in commercial and residential real estate. Mckinney has bought and managed over 300 apartments units.
• Also in 1996, Mckinney formed and is currently President of Diversified Home Mortgage, Inc. License NMLS #1483210, a lending division of Mckinney Real Estate & Investment Co. Mckinney and his lending team of loan originators managed, originated and closed over 350 million dollars in residential, commercial and constructions mortgage loans over a 25-year period. As a licensed mortgage Banker/Broker and correspondent lender, Daniel and his team are a decorated top producer and originator for companies such as Carrington, A & D Mortgage and Franklin Bank. Daniel formally managed a warehouse line of 2 million with Franklin Bank.
• In 2003 to 2007 Daniel formed Momentum Home Builders LLC where he managed and supervised Residential and commercial construction and sales. Daniel designed, constructed and sold several residential homes, as well as custom homes in Houston and surrounding areas. Mckinney Currently develops and builds with his current company DMAC Capital Funding, LLC. He has projects currently under construction. DMAC Capital Funding, manages a mortgage pool fund, DMAC CAP FUND I which is a REG D Fund to provide bridge lending for Small balance income producing commercial real estate. DMAC Capital Funding also is launching other funds for real estate income producing projects and opportunities.
• Mckinney currently invests in distressed commercial and residential properties to, wholesale as well as fix and flip. Mckinney manages $2.000,000 in private funds from his list of private lenders. Those funds as used to purchase single family homes to rehab and resale. Mckinney provides his clients on an average 15 percent return on their money. Mckinney also is a commercial private money broker. Providing Bridge lending for commercial income producing properties starting at $2 million to $50 million. McKinney holds a Juris Doctorate degree in Law from Texas Southern University-Thurgood Marshall School of Law 96’, and BS in Business Finance from Huston-Tillotson University 88’. Former Executive board member of Houston Real Estate Association. Daniel has been a member of the National Association, Texas Association and Houston Association of Realtors for 26 years.
This is a financial model of an annual return. This model does not include origination fees and profit participation which we take part in on most deals we fund. This participation increases revenue and return on investment. We charge anywhere from 3% to 5% of the loan amounts for origination and our profit participation can range anywhere from 5% to 10% profit participation. Some cases we charge borrowers and early payoff fee of 1%. which is not included. These additonal fees will increas profits and our investors rate of return.
Development Control and Management
Most of our ground up construction loans will require DMAC Capital Funding and its construction team to control or management construction process to insure and protect the investment. With over 15 years of multifamily and residential construction experience we will mitgate the risk for ground up construction project funding.
|Mortgage Bridge loans||$20,000,000|
Multifamily Real Estate Investing
Investing in multifamily properties is a great option for those looking to get into real estate investing and feel comfortable with the responsibility and time commitment. Done right, they can be a great source of passive income. However, it’s important to have an in-depth understanding of how to find properties that will provide worthwhilreturns on your investment, and subsequently acquire them. Crunching the numbers instead of being influenced by extraneous factors will quickly give you comprehensive insight into an overall project.
What is multifamily housing?
A multifamily property is any residential property that consists of more than one housing unit and allows more than one family to live separately. Duplexes, triplexes, townhomes, apartment complexes, and condominiums are all examples of multifamily properties. Buildings with more than four units are considered commercial properties.
As the owner of a multifamily asset, you can either live in one of the units and rent out the others or live in a different property and rent them all out. If you live in one of the units, the building is considered an owner-occupied property. If you don’t live on-site, you’re considered an investor. This is important to know because the rules for obtaining a loan or mortgage are different for occupying owners and investors.
Real estate financing options for multifamily investments
Financing options for multifamily housing investments include cash financing, hard money lenders, banks, seller financing, and peer-to-peer lending. Generally speaking, every opportunity will be different, and which financing route you choose will depend on your timeline, your financial situation, and other factors. As mentioned previously, if you choose to live in one of the units while renting out the others, your property would be considered owner-occupied. This means that when you’re looking for financing options, the second unit’s income will be factored into the lender’s qualifying factors and may make it harder to find a loan.
How to buy multifamily properties
Much like purchasing a single-family home, there are real estate websites such as LoopNet.com that allow you to filter results for the type of property you are looking for. Another option is to work with a real estate agent who specializes in multifamily housing. They may have a greater understanding of opportunities in your area and even some that have not yet hit the market. If you’re looking to invest in a duplex, triplex, apartment building, or condominium complex, you can begin your search with this checklist:
- Location: Location is one of the most important factors for real estate investors, particularly for multi-family properties. You should choose an area with high employment, well-maintained neighborhoods, population growth, and where housing is in high demand.
- Number of units: Evaluate the property as a whole. Investors should consider the number of units in the property, including the number of rooms in each unit. If you’re a beginner, we recommend beginning your real estate search with three types of multifamily properties: duplexes (two units), triplexes (three units), or four-plexes (four units). Typically, these properties have the most upside with the least amount of risk.
- Potential income: The next step is to determine how much income a property can generate. There are websites such as Rentometer.com, Zillow, and Realtor.com that let you analyze rental rates based on the size and location of your property. If you’re looking to remain conservative, you can use the 50 percent rule. As the name suggests, you should estimate your operating expenses to be 50 percent of the gross income. So, if a rental property makes $40,000 per year in gross rents, you should assume $20,000 would go towards expenses. This does not include the mortgage payment.
The benefits of multifamily investing
Some benefits you can expect when investing in a multifamily property and which will make your investment worthwhile include:
- Greater cash flow: Unlike single-family properties, which generate one source of monthly income, multifamily properties draw rents from multiple units.
- Less risk: When investing in single-family rentals, income is lost when the home is vacant. However, because multifamily properties have numerous units, you can offset the loss of income from one vacant unit with the income from others.
- Taxes: You can make more income by renting to multiple tenants while only paying taxes on one building. You can also write off some of your home maintenance as a business expense and prorate part of your mortgage interest payments.
- Scalability: With multifamily investments, the multiple units involved count as multiple properties instead of a single-family home representing one property. It’s a great step towards growing your real estate investment portfolio and possibly venturing into mixed-use and/or larger apartment properties.
The challenges of multifamily investments
Despite all the benefits of investing in multifamily properties, there are some downsides, which include the following:
- Multiple units = higher cost: Multifamily investment properties usually cost more upfront. You also need to factor in the maintenance costs of multiple units.
- Being a landlord: Finding and managing tenants is a time commitment. If you live near your tenants, you may get knocks on your door throughout the day with maintenance-related questions. And you’ll need to feel comfortable screening and negotiating lease terms with your tenants.
- Selling the property: It can be more complicated to sell a multifamily property that has tenants because you’ll have to coordinate showings and appraisals.
Setting yourself up for success
On top of the considerations we’ve outlined, does the property allow for a healthy return on your investment—in terms of both time and capital—or is it a deal that’s too good to be true? Performing your own due diligence is critical to determining which properties will allow you to extract the most value. Additionally, knowing when to say no to a deal is just as important as knowing which projects are worth it.
DMAC CAPITAL FUNDING, LLC is an internally managed real estate investment managment company offering short-term, first deed of trust loans secured by real estate to fund the acquisition, renovation, rehabilitation, or development of residential or commercial properties.Contact one of our lending experts today.
The Fund’s strategy is to pursue opportunities to make hard money bridge Purchase and refinance loans for income producing multifamily commercial real estate properties, and some non-owner occupied residential properties.
Frequently Asked Questions
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