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What are the Problems with Delaware Statutory Trusts

Delaware statutory trusts (DSTs) are a popular legal structure for holding and managing real estate. However, like any legal arrangement, DSTs have their potential drawbacks and concerns. Some of the common problems associated with Delaware statutory trusts include:

  • Pacific Freedom Fund
    · A fund that pays you 7.0%—10.0% on your idle capital depending on the amount invested · Distributions: Monthly · Secured by real estate deeds of trust. · No penalty for early withdrawal · Interest payments are made monthly. · Minimum investment: $50,000
  • What is the purpose of the fund?
    The Freedom Fund provides real estate loans with short durations (typically less than 6 months) or loans which we sell to institutional investors. In 2022 Pacific funded, closed and sold more than $400 million in loans to institutional buyers. In 2023 our loan demand is expected to exceed $500 million. Loans are sold to institutional investors, on average every other week. Most of the loans we make are to well-qualified borrowers who want to buy a new home before their current home sells. Banks have tightened their lending requirements to the point where it takes a long time to get a loan, if at all. That is our sweet spot. By providing short-term loans, we are able to help well-qualified borrowers get into their new home. Providing short-term loans to well-qualified people is also how we can easily sell our loans to institutional investors.
  • What makes this fund unique?
    This fund is specifically intended to be a place where qualified investors can deposit their idle cash to earn above-market returns.
  • Why we love this fund?
    1. This is a highly liquid fund. 2. Loans are secured by real estate. 3. Loans are always in first position. 4. Loans are only made to borrowers with excellent credit 5. Loans are always for less than 70% 6. Loans are sold to institutional investors, on average, twice a month so you can withdraw your money. 7. Your returns are not subject to the whims of the stock market, real estate market or the economy. 8. Loans are only made to well-qualified borrowers with excellent credit.
  • How are investors paid?
    Investors are paid a flat interest rate of interest, based on the amount of their investment currently ranging from 6.0%—9.0% per annum, on capital invested.
  • How is investor capital secured?
    The Freedom Fund is the lender on all loans that it funds. It owns the notes. The only assets of the Fund are cash or real estate-secured loans. The Freedom Fund’s capital is used for no other purpose. Loans identified for sale are typically not held longer than 30 days.

It's important for anyone considering investing in a Delaware statutory trust to thoroughly research and understand the structure, risks, benefits, and potential challenges, and to consult with legal, financial, and tax professionals to make an informed decision based on their individual circumstances.

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