Where Your Return Actually Comes From

If you are evaluating the Investor First Fund, there is one question that matters more than any other before you decide to invest: Where does the 8.5 percent actually come from?

It is a fair question. Any fund can put a number on a one-pager. What matters is whether there is a real, traceable mechanism behind it. Here is exactly how this works.

The Fund Owns Loans, Not Properties

When you invest in the Investor First Fund, you are not buying real estate. You are buying a share of a pool of real estate loans. We make short-term loans to borrowers in Texas, secured by residential properties. Those borrowers pay interest every month and origination fees at closing. That interest and those origination fees are the engine behind your return.

There is a practical difference between owning property and owning the debt on property. As a property owner, your return depends on appreciation, occupancy, and market timing. As the lender, your return is contractual. The borrower agreed to a rate. They pay it every month, regardless of what the broader market is doing.

Two Sources of Revenue

The fund generates income in two ways.

The first is monthly interest. Our loans typically carry rates between 10 and 12 percent per year. On a one-million-dollar loan at 12 percent, the borrower pays about ten thousand dollars in interest every single month. That payment comes to the fund.

The second is origination fees. Every time we close a new loan, we charge the borrower a fee to originate it. That fee typically runs between 2 and 3.5 percent of the loan amount. On that same million-dollar loan, that is twenty to thirty-five thousand dollars earned at origination.

Both of these flow into the fund as revenue. They are the source of everything that follows.

Investors Get Paid First

After revenue comes in and operating expenses are covered, the first obligation the fund has is to the investor. The fund targets a preferred return of 8.5 percent per year, paid monthly. That works out to about 0.7 percent of your investment each month, delivered by ACH directly to your account.

The structure matters here. Stallion Capital Management does not earn its fee until after your preferred return has been paid. Your 8.5 percent comes out first. Whatever remains above that is where the manager earns. If the fund does not perform well enough to meet your preferred return, the manager earns nothing. Investors have have first priority, every single month.

A Closer Look at the Math

Put concrete numbers to it. Say you invest $250,000 in the Investor First Fund. At an 8.5 percent target return, you are looking at roughly $21,250 per year. Break that down by month and that is about $1,770 arriving in your account every 30 days. Not on paper. Not when you sell. In your account, by ACH, at the beginning of each month.

The Cycle Keeps Running

Here is what keeps the income flowing. Our loans are short-term, typically around twelve months. When a borrower pays off their loan, the principal comes back to the fund. We redeploy that capital into a new loan. The new loan creates a new stream of monthly interest and a new origination fee. The revenue comes in, the expenses are paid, your preferred return is paid, and the cycle repeats.

It is not complicated. It is designed not to be. Real loans, backed by Texas residential real estate, paid by real borrowers, every month.

Why This Matters

A lot of investments ask you to be patient. You invest today, and somewhere down the road, if conditions cooperate, you realize a gain. The Investor First Fund is built differently. The income is not deferred. It is not contingent on an exit or a market cycle. It shows up in your account while you wait for nothing.

The 8.5 percent target comes from contractual borrower payments. It does not depend on what the S&P does this quarter. It does not require you to sell anything or time anything. The borrowers are paying interest. That interest is yours.

If you want to understand the full picture, we are glad to walk you through it. Reach out directly to our team at [email protected] or contact us here.

**The Investor First Fund is open to accredited investors only. This post is for informational purposes and does not constitute an offer to sell or solicitation to buy securities. Please review the Private Placement Memorandum before investing.