Why invest in real estate debt
Investing in real estate debt gives Wholesale Investors exposure to an asset class with capital protection which benefits from a first ranking mortgages over the secured properties.
If the underlying borrowers default on their loan, the secured properties can be sold and the proceeds applied to repay Investors. A secured debt investment provides a priority position in the capital structure of the borrower and is repaid ahead of equity.
The proposed investment involves a conservative LVR of 35.8%. If the borrower defaults on the loan and the secured properties are sold to recover the debt, the properties’ value would need to drop significantly before Investors’ capital is impacted.