General FAQ's
Investors have the option to receive monthly cash distributions or to reinvest monthly earnings automatically. Cash Distributions occur every month through wire transfer directly to the investors account.
The minimum investment is $50,000
Class A investors receive a 6% cumulative non-compounding preferred return, an Excess Cash Distribution (profit split) of 80% / 20% (Investor / Manager) and have a 12-month lock-up period with 60-day notice. While Class B-1 investors receive a 6% non-cumulative non-compounding preferred return, no Excess Cash Distribution and have a 6-month lock-up period with 30-day notice.
ZINC Income Fund has a lock up period of 12 months with a 60-day notice of withdrawal. By having a lock-in period, it allows for stability of the fund.
ZINC ensures that each borrower provides a solid cash down payment creating a cash alignment of interest. Each loan is secured with a first position lien against the property, creating substantial protection of principal. The loan cannot exceed 70% of the After-Repaired Value.
ZINC originates loans directly to borrowers and is licensed as a direct lender. This allows us to control the origination resulting in a better loan product, as opposed to purchasing from un-related 3rd parties who do not have a vested interest in the performance of the product.
ZINC is very selective through the underwriting process. ZINC’s average borrower has prime credit, a solid cash down payment, and extensive exposure to real estate. ZINC only funds a small percentage of actual submissions, as our borrower qualifications are strictly enforced.
ZINC uses licensed appraisers to complete an appraisal to ensure an accurate property value for the corresponding loan, securing both an as is and after repaired value. ZINC then verifies the appraisal through a variety of other test methods to confirm accuracy.
ZINC’s average loan size is $300,000.
Before a property goes into foreclosure, ZINC works with its borrowers to bring the account current. If necessary, ZINC disposes of Real Estate Owned (REO) acquired through foreclosure by rehabbing the property and selling it. However, our historical average of REO is less than 1%.
The ZINC Income Fund can use leverage. The Manager carefully looks at the risk return profile to protect the Fund.
Investors are taxed in the state that they are domiciled in- For example, an investor that lives in Texas, Arizona, or Nevada would pay no state income tax even though they are investing in a fund that operates in California.
If an investor uses their IRA money, they are not subject to UBIT tax- UBIT tax stands for Unqualified Business Income Tax. The ZINC Income Fund allows individuals to invest through their IRA, which offers this huge tax benefit.
Investors are eligible for a 20% federal tax deduction on all income earned through the ZINC Income Fund.
ZINC handles all servicing of the loan in-house. ZINC believes through its in-house stringent monitoring and reporting process it provides best-in-class portfolio management capabilities and ultimately protection of investor principal.
An investor may get their money out in the event of an emergency based on the manager’s discretion.
ZINC focuses on California, because it is a nonjudicial foreclosure state. ZINC is able to be to quickly repossess the foreclosure property to rehab and sell. This allows ZINC to better protect our investor’s capital. ZINC also focuses on California due to our extensive knowledge and proximity of the California Real Estate market.
ZINC lends on distressed, single-family homes below the median cost of housing for fix and flip purposes.
The typical terms for ZINC’s loans have a duration of 9 months and a coupon rate between 9%-12%
Primarily in non-judicial West Coast states with a mild presence in other favorable states.
On average, our borrowers have a 700+ credit score.
ZINC is very selective through the underwriting process. ZINC’s average borrower has prime credit, a solid cash down payment, and extensive exposure to real estate.
ZINC handles all defaults. ZINC works with its borrowers to get current on loans. If not, ZINC will foreclose on the property. Once the property is in ZINC’s control, the property will be rehabbed and sold on the market.
Loan-to-value (LTV): Ratio of the loan to the value of the property.
Loan to purchase price (LTP): Ratio of the loan to the purchase price of the property.
Loan-to-cost (LTC): Ratio of the loan to the purchase and rehab cost of the property.
ZINC lends up to 90% of the acquisition cost and up to 70% of the After Repaired Value (ARV).
ZINC has originated over 1,500 loans with close to 1 billion in funding.
ZINC’s primary priority is protection of principal; not yield.
Performance FAQ's
ZINC Income Fund goal is approximately 7-9% which includes a priority return plus corresponding profit sharing. Historically we have achieved this goal.
ZINC’s loss ratio of capital is less than 1/8%.
ZINC has a delinquency rate of <5%.
There is a 1.0% servicing fee and 0.5% assets under management fee.
The Investor’s risk is limited to only the amount in the fund. The capital is secured by a 1st position lien on the deed of trust. Our historical losses average less than 1/8%, virtually none.
ZINC Income Fund outperforms most other funds in our asset class, a result of nearly two decades of experience in this narrow spectrum of lending. We are experts and are often sought to speak at industry events for this asset class
Management FAQ's
The Fund will be managed by ZINC Financial, Inc., a California corporation. The Manager is located at 1525 E. Shaw Avenue, Fresno, CA 93710.
ZINC Income Fund’s auditor is Spiegel Accountancy Corp and its Third Party Administrator is Verivest LLC.
Licensed lender by the California Department of Financial Protection and Innovation (DFPI)
Licensed Broker by the California Department of Real Estate
Licensed by the California Contractors State license board
Legal: Geraci Law
Auditor: Spiegel Accounting Corp
Compliance: Verivest LLC