Frequently Asked Questions
Answers to the most commonly asked questions about our Elite Opportunity Fund.
What exactly am I investing in?
We are currently accepting investors in PFG Fund III, LLC which is our fourth private money investing fund. When you invest in PFG Fund III, LLC, you will be investing in a promissory note with a promised return on your money. This structure was selected so we can pay you a flat and predictable return.
What are my risks?
There are always risks with investments that are not backed and insured by the federal government. Using real estate to secure notes is one way to manage risks from loaning money. As an investor in PFG Fund III, LLC, you want to know what the risks are to the investment fund, so you can understand what the risks are to you individually. There is a full list of risks included in the Form 1-A as part of the full prospectus. Here is a short summary of some of the key risks:
Default by buyers – There is always a risk of a default by the borrower. A default would occur if the borrower stopped making payments and we are forced to repossess the property. Pine Financial Group, Inc is a conservative lender with a low default rate. Currently less than 3% of the loans we originate go into default. We have the borrower sign a note and a deed of trust or mortgage. We close every deal with a reputable title company and carry the appropriate title insurance. If there is a payment default, we have the option to negotiate with the borrower or accelerate the loan. To accelerate a loan means to demand full payment for all principal and interest, and if that does not occur we will work towards repossession of the property. Chances are high that the borrower will deed the property to us in lieu of foreclosure to save their credit from the foreclosure, but if that does not occur, we will foreclose to take ownership of the property. In any case, we believe we are in a secure position with a low loan amount compared to property value.
Reduced demand for Rehab loans – If the money in the fund is not loaned out in our high interest rate real estate loans, it could impact our profitability. It is the goal of management to keep as much money loaned out as possible, keeping returns to investors high while maintaining a conservative profit. Because this fund is set up to pay a promised 8% return, funds will be paid to investors regardless if money is loaned out. Not keeping money loaned out could impact the Fund’s ability to pay the promised return. If that does occur, we have several options that we may implement, which include:
- Return of capital to the investors
- Lending in new markets
- Changing our loan products
- Other real estate related investment options
- Too much demand for rehab loans – Too much demand and not enough money would cause Pine Financial Group, Inc to turn down business; which could affect its reputation in the market. If this occurs, and we find ourselves turning down business, we will attempt to raise additional funds to continue business and fulfill market demand.
What are my returns and how are they paid?
The fund will be signing notes in favor of investors with a promised 8% annualized return. Investor interest will be paid monthly. Investors will have the option to receive interest each month or reinvest that interest back into the fund.
What if something happens to the property?
Property, casualty, and fire insurance will be purchased on every property. The insurance must be set up as a builder’s risk or a vacant property policy. While a property is under construction and vacant, there are additional risks, and it is imperative that the correct policy be in place. Pine Financial Group, Inc is listed on every policy as a mortgagee and will be listed on any payments for claims filed because of a loss. We are also notified if there is ever a lapse in the policy.
What if something happens to the fund manager?
The fund manager is Pine Financial Group, Inc. There are policies in place within the company delegating responsibilities should anything happen to a senior person. Pine Financial Group can run on its own if any one or two people cease to contribute. If Pine Financial Group, Inc ever discontinues business, all investors in PFG Fund III, LLC will receive their investment back with interest as the loans within the fund are liquidated.
What is the maximum Loan-to-Value (LTV)?
The majority of loans will have a maximum loan to value of 70%. There could be exceptions to this, depending on compensating factors, which could include; larger down payments, superb credit, or Pine Financial Groups’ experience with the borrower.
How is the loan to value determined?
In most cases, a full interior/exterior appraisal is done giving us the value after repairs are completed. The appraiser must be an approved Pine Financial Group, Inc. appraiser. The approved appraiser bios and experience are listed in the business plan as part of the Prospectus.
How do we know the property is getting repaired?
Pine Financial Group, Inc establishes a repair escrow fund for all rehab loans, which is held in our trust account. The funds are released to the borrower or the borrower’s contractor as repairs are completed. The final draw is not released until the project is 100% complete. With each repair draw request, we personally inspect the property.
What if I need/want my money back?
This fund is set up to have a minimum commitment from its investors of 24 months. Investor funds will be returned upon request after 24 months. If an investor requests their money back, all funds with interest will be returned as quickly as possible. If there is not enough money available to return capital, it will be returned as soon as sufficient money is available. This would most likely occur at the time of the next loan payoff, but should not exceed 90 days.
What paperwork is involved?
There is not much! After reviewing the Prospectus, every investor will need to complete an Investor Application. This is a simple form that collects basic information about the investor. Investors will then receive a signed Note showing the amount and the terms of their investment, along with a statement showing their updated account balance.
Invest with Pine Financial Group
For more information on investing in our Elite Opportunity Fund, please complete the following Intake Form and we will be in touch.
THE UNSECURED PROMISSORY NOTES (“NOTES”) ARE BEING OFFERED ONLY IN THE STATES OF COLORADO AND MINNESOTA. NO NOTES WILL BE SOLD WITHOUT PROPER AUTHORIZATION. THESE NOTES ARE NOT FDIC INSURED. THIS ANNOUNCEMENT IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES. THIS OFFERING IS MADE BY PROSPECTUS ONLY. AN OFFERING CIRCULAR CAN BE REQUESTED BY CONTACTING THE COMPANY REPRESENTATIVE, MR. KEVIN AMOLSCH AT (303) 835-4445.
THE NOTES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT DETERMINED THE ACCURACY, ADEQUACY, TRUTHFULNESS, OR COMPLETENESS OF THIS DOCUMENT AND HAVE NOT PASSED UPON THE MERIT OR VALUE OF THE NOTES, OR APPROVED, DISAPPROVED OR ENDORSED THE OFFERING. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF PINE FINANCIAL GROUP, INC. AND THE TERMS OF THE OFFERING, INCLUDING THE DISCLOSURE, MERITS AND RISKS INVOLVED. PFG FUND III, LLC HAS NO OPERATIONS AND OWNS NO PROPERTIES, THE COMPANY MAY NOT BE ABLE TO FUND SUCH INTEREST PAYMENTS, IN ADDITION INVESTORS COULD LOSE THEIR ENTIRE INVESTMENT. IF PFG FUND III, LLC CANNOT GENERATE SUFFICIENT REVENUE AND CEASE OPERATIONS, YOU MAY LOSE YOUR ENTIRE INVESTMENT.