Why Accredited Investors Trust the Integrity Income Fund: A Deep Dive with Jamie Bateman and Marc Blunden

Alright. In this episode, you're gonna get a chance to hear what our integrity income fund can do for you if you are an a accredited investor. Mark Blu, my senior fund manager, and I go through the details of the integrity income fund and why it may be a great fit for you. This fund serves accredited passive investors. We also do have potential opportunities for non accredited passive investors, and we do serve non accredited active mortgage known investors through our mentorship program.

But in this episode, you're gonna hear all about the benefits of the integrity income fund, the fund has been operational for over 2 years, almost 2 and a half years. We've not missed a single payment. We do investor distributions monthly, and you'll hear some of the, pros, some of the cons to the fund. And so you can determine whether this investment opportunity could fit your your needs. Very briefly at a high level, some of the perks to investing in this fund are that we take on no leverage.

We invest in first lien mortgage notes, and therefore, in the grand scheme of things, it's a very... It's a it's a lower risk investment. Your investment capital is not subject to the ups downs and the swings of the stock market, and there is hard collateral that's backing your investment in the form of residential real estate. Again, we have a strong track record in the fund itself as well as beyond the fund with our management team, and 1 of the other perks about our integrity income fund as compared to a lot of other mortgage note funds and similar, credit funds is that we have a a short commitment of only 12 months. So if you have capital that you're not sure what you're gonna do with, you wanna park your capital with us, receive monthly payments, and maybe in a year from now, you wanna...

You have a different use case for that money. There's no issue with getting your funds back, So it's a relatively liquid fund when compared to many other similar funds out there. Again, this fund is for credit and investors and this presentation that Mark blu and I give. Should not be cons as legal or financial advice and all investments do carry risk. Enjoy the episode.

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Welcome, everyone. My name is Jamie Bat, and I am joy joined by my senior fund manager, Mark Blu. We are here to provide an overview of our integrity income fund, which is for accredited investors. We're gonna get into a little bit of our background, so I won't go too far and range to introductions here, but Mark, briefly who are you? And how are you doing today?

Hi, Jamie. Thank you. I am as you said, the senior fund manager at integrity income fund been in the mortgage notice space for about a decade in various roles from document custody to fund management servicing, and it's great to be here today. Absolutely. Alright.

K. You can take this 1. It's not disclaimer. We're not gonna read for it, but just be... Aware that all investments carry risk we're not an investment adviser, and you should seek legal advice your investments, and you can pause if you want to read for it.

Alright. So our integrity income fund management team. This is of, more in the upside of things, we you can read about me there and and you can go to our website and read even more about me if you'd like to. I've been, real estate... An active real estate investors since 2010 and have held various leadership roles within...

And the Department of Defense in the military, etcetera, and have been actively investing in mortgage notes since 2018, and this has been my primary focus since then, also have started and run a a loan servicing company, which has giving me quite a bit of experience, and this is my second note fund that I have managed. Mark already introduced himself, gave a little bit of his background mark, did you wanna add anything there? Yeah. I could add that I'm currently a real estate agent in California and also been consulting with with loan servicing companies lately. Absolutely both relevant.

And Raj is does a lot of a back end work for us, and she's been with the team for almost a year and a half, and does a fantastic job, making us look good. Yes. Alright. Next slide. Go ahead.

Okay. And then continue with the team. We have Elisa who is an administrative assistant and helps out with marketing. She brings a lot of experience with content creation. And then we have Jess Gold.

She is our marketing specialist. She brings a wealth of experience and digital marketing and content creation. We're really lucky to have both of them on board, and then we have our company mascot blue apron. That's right. Alright.

So getting to the the meat of the presentation, which you all may care about a little bit more than the information about the team. But our our... We launched this fund over 2 years ago in June of 20 22. We had been working on the fund in the... Beginning parts of 20 22.

We actually activated the fund in June. You can see more of the details about the fund here. The fund is for accredited investors. And it is an income fund. It's not a growth fund.

So we're focused on producing monthly distributions, preferred returns to our passive investors, and we've done so. We'll get into this. We've done so consistently for... The entire period that the fund has been operational. The fund has a 1 year minimum commitment.

So upon, 12 months, you can request your funds back, and we have, in all cases delivered those funds, back well within the time frame lot allotted. It's an evergreen fund, so there's not a a determined predetermined end to the fund. So the fund just keeps keeps going and keeps producing income. We target a preferred return for our investors of 8 percent annually. And again, those distributions are are made monthly, and we've made them each month since the beginning of the fund.

Again, targeted 8 percent annually, and we'll get to do some more of the reasons to invest in the fund in a minute. Okay. Fund objectives. So fund requires assets with the goal to effectively deploy all proceeds. As quickly as possible.

Our goal is to preserve and protect everybody's contributed capital. That's number 1. Our goal as Jamie just mentioned is to provide members, investors with a targeted 8 percent return. Which is paid monthly. We also aim to generate excess cash flow, profits, and then, of course, provide investors with full return of capital that they contribute, upon liquidation of their individual investments or upon liquidation of the fund.

That's right. Okay. So we invest primarily in first lien mortgage notes. This has been my wheelhouse in our wheelhouse for for years now. First lien mortgage notes, senior debt on owner occupied single family residences.

We do occasionally buy contracts for deed. We do occasionally buy land notes. We do occasionally lend. And so we have a... Some discretion with regard to our buy box, if you will, as far as the assets owned by the fund and the assets that we invest in, but our wheelhouse and our bread butter, it's first lien mortgage notes, and there are a lot of reasons for that.

We purchased assets nationwide, oftentimes that that's actually limited by where the where the notes are available. And so we've purchased notes in well over 20 states, probably 25 at this point. And this fund in particular is aimed is is the goal is to invest in performing and rep performing or income generating assets. So we may on occasion purchase a non performing or sub performing loan. But that's not the, primary makeup of the assets of this fund.

Mark anything to add here? No. I think that covers it well. K. Go ahead.

It's so a little bit more about our backgrounds. So Jamie, as he mentioned, you dispute it in the space for a long time, actively buying managing and selling. Mortgage notes and servicing, over 250 notes, principal balances of around 30000000 across more than 30 states. As I mentioned, I've been in the space about a decade and I've also been heavily involved in acquisition management and disposition of mortgage notes. Absolutely.

Alright. So as I mentioned, the integrity income fund, we have an excellent track record. With consistency of monthly payouts, distributions for our investors. Just a a hypothetical example, if you invest 50000 dollars, over 2 years, you can see here how much income would would be generated, presuming we, the the fund performs as we anticipate. And as as we have shown it has thus far.

Again, no guarantees. There risks with all investment all investments, but this track record is something that we are absolutely proud of. Frankly, there are a lot of funds and s that are struggling right now, whether we're talking about note funds or not. I know of several funds that have paused distributions or, you know, real estate s indications that have gone are requesting or putting into effect capital calls etcetera. So a disruption of performance for the investor, and we feel that our fund, while it does carry risk is certainly on the safer end of the spectrum and we'll get into the, more of that here in a in a minute.

Okay. And just a follow on from that, you can see a couple of charts on this slide, the chart in the top left corner just shows the monthly payout for 3 different investments and the chart in the bottom left shows the cumulative payout for those 3 different investments. 75000 and a hundred thousand. And just to be clear, these payments are interest only payments. So the entire principal is kept invested in the fund, This is a pretty straightforward fund all things considered, there's no option to compound or reinvest your distributions.

The distributions are made, interest only, and the principal is preserved in the fund. Mh. Alright. So key reasons to invest in the integrity income fund. Our funds does not take on any leverage.

So there may be some other note funds out there frankly that may be offering a higher targeted preferred return. A lot of those are able to do that because they take on debt. So although we buy debt, we don't actually take on any leverage in our fund. In other words, we don't take on any loans as a borrower to juice the returns so to speak. So that creates a lower risk profile for the fund and for the passive investor.

We have a strong management team as we've already covered. We have a lot of experience in managing non performing assets. Currently, our non performing note fund is wrapping up. We have a lot of experience in dealing with foreclosure, bankruptcies, first lien second lien, lots of messy situations, and that's why we feel quite confident that If and when some of these assets do go non performing for a brief period of time, hopefully. We have plenty of experience in dealing with those those scenarios.

Also, we do have c investment in alignment, I personally am invested in the fund as a limited partner or a passive investor. There's clear diversification in this portfolio. That's... That comes in many forms comes geographically. And also with borrower type and even asset class as we went over a little bit earlier, we offer a relatively high yield targeted yield, and there's a relatively low risk in relation to other investments as you can see here in the capital stack graphic to the right.

Again, there's always risk, but in comparison to some other asset classes out there, senior debt on owner occupied properties with no leverage. It comes at a a pretty pretty low on the risk profile in in the capital stack. Investor friendly open ended fund structure like we covered, and again, we cover the short time commitment already. Okay. Invest characteristics, what do you need in order to invest in the fund?

You need to be an accredited investor and hopefully, you'll be looking for steady, relatively high yielding investment with relatively low risk and targeted monthly payments. And maybe you're also are looking for a short time commitment. Our lock up period is just 1 year, and that's low by industry standards. So if that's what you're looking for, The integrity income fund could be a great fit. And, of course, you're looking for capital protection.

As we mentioned, all assets are backed by Us residential real estate. We've also got non diluted as another feature of the funds. So new capital quickly deployed into interest bearing assets. And as Jamie mentioned, we don't have... We don't use any leverage to acquire assets.

Yeah. Those 2 bullets that Mark skipped over, I think they really should be sub bullets under the assets backed by Us real estate a bullet. And essentially, what we're trying to say here is the the assets, collateral that is is backing these notes that we purchase. So the real estate that's backing the notes that we purchase is substantially higher in value than the note itself, and that provides a level of protection because of that that collateral and that equity that's standing that's backing the note that we purchase, And yeah. So so, again, always risk, but this is fairly low in the risk spectrum.

All things considered. Anything else to add here, Mark? No. No. That's it.

Alright. Not gonna go through each 1 of these, but we have a a robust team and set of vendors, and people we work with. This can be server... Loan servicer, attorneys in different states, like, this type of thing is always changing quite frankly, and this is why you... If you're gonna be an active note investor, you've gotta really be you know, plugged into the kind of the the industry as far as who who's doing well, who's not who's who's responsive who's not, who's providing a high level of service who's not, and we're on top of this, every day.

So, this slide could look very different in 6 months from now, but this is a snapshot of some of the vendors who we work with. Okay. So some of the reasons to invest either in a note fund or in notes in general. This is an alternative asset class, so it's not your typical stocks and bonds. So it's insulated from a lot of the volatility of the stock market, and some of the other markets frankly, your investment is backed by brick and mortar.

So so we are purchasing as we covered firstly lien mortgage notes backed by Us residential real estate and investing in notes can be passive and 1 way probably the most passive way to invest in mortgage notes is through a fund like the integrity income fund. 1 thing that we really enjoy about investing in mortgage notes, is the fact that we often have a very positive social impact. So we're able to work with borrowers who... This is their home, and, you know, we're not trying to kick people out of their homes. We will use foreclosure as a last resort if need be, but we'd much prefer to work with a borrower and keep them in their home.

And, honestly, that's typically more profitable for us as investors and for the fund as a whole anyway. As a side note just did AAA case study presentation a couple of weeks ago on the b the bank podcast. That's something if you're really interested in the social impact and how we were able to keep, actually, in that case, we were able to rescue, kids from a bad situation. But the fact that we have this discretion as active managers of mortgage notes, essentially as the lender or the bank and working with these borrowers is a is a real positive thing about this asset class. And you can read that second bullet there.

Essentially, we're we're trying to work toward a win win for the borrowers and us as investors. Multiple exit strategies. Again, I covered the fact that we have a lot of experience in dealing with non performing notes, and we can't always predict exactly how each note is gonna go. We do thorough due diligence and and underwriting on the borrower, the property and the paper, but we can't always control exactly how it's gonna go. The fact is though, if we purchase correctly, We're okay with pivoting and going toward a different exit strategy depending how things unfold and we have a lot of experience in that area.

So notes in general allow you to be a the lien versus a landlord. It's a little bit more passive in that sense. And 1 of the greatest things about investing in a note fund like ours is that you can invest through your self directed ira, and a lot of people don't even know that a self directed Ira is a thing, any, self directed retirement account you can use to invest in mortgage notes and in our integrity income fund, and we've worked with numerous Ira custodian and have lots of experience in that arena. Quickly, on that point, mortgage notes inherently don't offer any tax advantages, and that's why pairing investing in mortgage notes with a self directed account can be a powerful combination. K, Mark?

Okay. Here are some macroeconomic considerations. For, investing in a no fund. So we're we're relatively ins from external factors such as interest rates, inflation and income levels. As Jamie hinted up, were insulated from stock market volatility or bond market volatility.

And that volatility is much higher than, in the stock market than it is in real estate and notes. So relatively safe in that regard. Our real estate has historically been a good hedge against inflation over the long term and by extension, notes, mortgage notes are as well since they're backed by residential real estate. And if a loan turns non performing our, fund management team has significant experience dealing with such loans as we talked about earlier in the presentation. And 1 thing I would just wanna add to the third bullet is that with performing notes where the borrowers are actually making payments.

The value of the note itself over time goes down, but in general, the value that collateral goes up, And so what that allows for is equity protection. So... Since you're not as an investor in this fund purchasing an individual note, you may not care as much about the the value of the note going down. What you do care about is the protection of your capital and preservation of your capital. And so over time, the assets that we purchase and that we invest in actually get less risky because of that...

But equity protection that is inherent in this asset class. Alright. So note fund Faqs, again, we've covered some of this already. When you're invest in a note fund, you're making a passive investment and we... You're leaving the management of the notes to us as the experience fund management team.

When you're actively buying notes, that's a different different thing entirely. Some people do both. I do both. But they're different they're different. So, a lot of, frankly, a lot of Guru out there like to paint a picture that all note investing is passive, and that's just not true.

We do a lot of work on our end in managing these assets, and that is so that you don't have to. There are risk factors in with any investment like we've covered, but there's a lot of diversification when you're investing in a fund as compared to putting all of your eggs in 1 basket and buying a a single note. And again, we covered the fact that an Ira is a great way, a great vehicle, to invest capital into a note fund. Here some of the pros and cons, to investing in a note fund as compared to mutual funds, Alright. Case study 1, we've just got 2 case studies very quickly for you.

These are intended to simply give you a high level snapshot of the type of asset that we invest in and that we purchase. In the integrity income fund. Although these notes are actually owned by the integrity income fund at this time, these are just example case studies. Mark, can you handle this first case study? Sure.

So this first 1 is on a property in New York, and we bought a heavily delinquent non performing note, and our strategy was to modify that note. So the end result, we enabled the borrower to stay in their home, get back on track and start performing. We significantly increased the balance of the note by incorporating a lot of the fees, charges and accrued interest on unpaid interest into the principal balance. We generate consistent cash flow for the fund, and we ended up with a much more valuable and liquid, or sale asset, should we wish to sell it? And then some some data points.

The Up went up from 30 to 35000. We did a pretty significant debt forgiveness for this borrower, 20000 dollars of charges and fees, but what's the the key point here is that we purchased this note for 5 k, and we're able to liquidate it for 21500. Exactly. And just... This is...

Again, just gives you a snapshot of the type of asset that we like to purchase and how we like to keep borrowers in their homes. In this case, there was a lot of communication between the borrower and, actually, there was an inspector that went out in to the property and the borrower indicated he wanted to speak to the lender And the the servicer just hadn't done a good job of communicating with the borrower. And so there was a lot of opportunity here to work with the borrower who was very motivated to stay in his home. He's been consistent scheduled Ach ever since for for several years now since the modification occurred. And so again, yes, we forgave a lot.

And... But but in the end, we kept the borrowers in their home, and produced much more valuable asset in the note itself. Case study 2, I'm gonna fly through. It's hard to read this graphic, but essentially, what we did with this this contract for deed or land contract was that we converted it to a note and mortgage, which instantly provides equity to the oc, or the the, buyer of the home, and also lowers our risk and our level of headache and work that is inherently associated with Cf or contracts for deeds. So we were able to work with the borrower in this case, keep the same terms, meaning the same principal interest each month, same payment amount, but convert from a contract for deed to a mortgage.

Note in Michigan. And again, the adds value to the note itself so that when we go to sell this note, it has more value, and it instantly provides immediate home ownership and equity to that to to the oc. K, Mark. Alright. So here's a an overview of the investment process for the fund.

So step 1 would be to schedule a call with the management team or notify us all your interest, and you can easily do that by heading to our website and clicking on the big invest now button. Yep. Labrador lending dot com is where you went ahead and click invest now and submit your information, and we will get back to you. Yes. Thank you.

And then more formal procedure you would then be to review the... The fund documents, the private placement memorandum subscription agreement. You'd confirm that you are an a accredited investor, which is important for this fund. You'd then execute your fund documents, you'd initiate wire of monies out of it to the fund, and then you'd be earning your targeted 8 percent month period to return. Exactly.

And we walk you through this process, so it may look a little bit overwhelming at this point. But we we'll hold your hand through this process, and we, also, like I mentioned, we work with many different Ira custodian, if you're investing with... Through a custodian. So we'll First thing is to head over to labrador lending dot com and click invest now to get started. And that would be it.

Mark, anything to add? No. I don't think so. I think we covered all of the main points, and we're excited to hear from some of our viewers. Absolutely.

Well, thanks for joining us everyone. This has been great. We appreciate your time. Take care. Thank you for joining us on from adversity to abundance.

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