I’ve been in business for a long time, and at a high level for a pretty long time. I’ve transacted over 7,000 doors. And when you’re operating at that level for any length of time, everybody has some Ls, right? And so fortunately we’ve had a lot of really, really good deals, and unfortunately we’ve had a couple that have lost money.

Here’s the key: I’ve never lost an investor dollar. I have always absorbed the loss personally and wrote a check to the investors to make them whole on any given deal that we do.

Plus, because of all the lessons learned, we do far better deals today than we did earlier on in our career.

Legacy Cash Flow Fund is a debt fund. You invest in the Legacy Cash Flow Fund, and the Fund then loans money to different deals. I don’t lend it to other investors.

I have invested in other people’s deals before. I’ve brought money to other people’s deals before. I have sponsored loans for other people’s deals before. And what I’ve come to realize is, most other people don’t have the experience that my team has and don’t do the right thing, unfortunately, or, have never really built the muscle in order to then get out of hairy situations that my team has.

So I do not invest this money with anybody else. It is only in our own deals, and deals that I know are already performing and that I’m already familiar with.

So Legacy Cashflow Fund will provide a loan to these deals to swap out higher interest loans that are already being serviced.

These loans are at a loan to value, typically not exceeding 70-80%, meaning our senior debt is typically somewhere in the neighborhood of around 60% right now.

These loans would swap out our mezzanine debt, which might bump it to 70 or 75%. But there’s also a cushion of limited partner equity that’s in each of these deals.

From a loan to value standpoint, it’s a very safe and cushioned position that the Legacy Cashflow Fund will be in.

We make payments on a quarterly basis. Every single quarter, you have the opportunity to take those as distributions and have that predictable cash flow into your life. If you prefer to let it accrue, it would add to the principle balance of your investment and you can allow that interest to compound on a quarterly basis. The choice is yours.

At the end of the year, you’ll receive a 1099 for any distributions that are made.

Yes!

So let’s say you wanted to bring $250,000 today and you commit for 36 months on this. You’d earn the base return of 10% plus an extra 1% because you’re adding an extra 24 months to the base timeline of 12 months (so 11% on on your money each year).

Now let’s say you have some sort of liquidity event that occurs down the road that gives you more cash, and you want to bring another $250,000 to the Fund. You can add it to your current investment principle to bump you up to $500,000. At $500,000, you earn an extra point per year, so now you’re at 12% annualized return instead of 11%.

The only caveat we’d ask of you is to restart the timeline. If you bring more money later, that’s totally fine, but we would just restart the timeline for another 36 months from whenever that extra money comes into play. And then you would earn it on the full balance at that time.

Now, let’s say you got certain buckets and you need certain amounts of liquidity for either this new amount of money or the original amount of money and you can’t commit to another 36 months.

We would just keep it in two different buckets. So you’d earn the 11% on the original investment — and let’s say the new $250,000, you only want to commit for 12 months. You would earn the base return of 10% on that.

There’s certain things that happen in life where maybe you need access to these funds as liquidity and you can’t wait until the end of the term that you committed to in order to get that money back.

Listen, I totally get it.

Fortunately, we’re very capable of raising money, and if you come to a situation and there’s not enough liquidity in the fund to pay out your money at that time, I can usually swap it out in about 30-60 days.

So it’s, it’s not a formal thing that’s written in our paperwork or anything, but give me a call and we’ll work it out.

It’s only happened actually a couple times for all the deals I’ve ever done over a decade plus of raising private money, but every time I’ve been able to do it.

So if life does happen, just realize I can get you liquidity inside that 30-60 day timeframe by swapping you out.

The other thing is I have $1.6 million in this fund currently and I maintain a certain amount of additional liquidity to then move money in and out as needed in order to fill any gaps. So I can usually throw my own money in and swap you out that way, or it would at least give me a little bit of time to then go to my network and bring in some more cash as needed.

The only caveat to that would be if you committed to five years and you were earning a higher rate of return because of that timeline and you had to drastically cut it short, we would have to do a little bit of adjusting on rate.