Strategic Lending Fund 1

The Investment Strategy of the Fund will be to create a diversified portfolio of high yielding risk managed asset based loans (“Assets” or “Company Assets”) by collateralizing and securing each loan with a correlated asset. The assets the Company managers have extensive knowledge and experience in will be a combination of real estate, pledged receivables, pledged revenue, pledged equity, or other generally acceptable collateral. The Company expects to spread its risk geographically, by asset type, by property type, by duration of debt term, by exit strategy of each Company Asset, and by investment size. The Company will invest in a multitude of relatively small assets of varying types in order to 1) preserve and protect Investor capital, 2) provide a reliable income stream to Investors (both Note Holders and Members), and 3) diversify the overall risk to the Company and its Investors.

The Manager and its principals have extensive experience in the “small balance” arena on both the asset and investment side of real estate and asset based Company operations. Its experience, business systems and methodologies, personnel, asset valuation capabilities, and track record in this real estate niche are the genesis and driver of the Company’s Investment Strategy.

We intend to partner with community development nonprofit organizations with an emphasis on housing, by partnering with these groups, we can generate unique tax advantaged projects that help develop local communities with for profit dollars. This structure can be very advantageous in generating high quality high volume deal flow combined with the tax savings benefits of nonprofits.

The Company, either directly or through subsidiary entities called special purpose vehicles (each a “SPV”), will invest in a variety of real estate based Asset types, including but not limited to the following:

• Individual whole loans (either through origination or acquisition) secured by one or more deeds of trust on a variety of real property types
• Participation interests in real estate secured loans
• Membership units (equity) or notes (debt) to an LLC or Company that invests in real estate based Assets
• Direct fee simple ownership of real property
• An equity interest in an LLC (or other legal entity) which owns a single property in fee simple
• An equity interest in an LLC (or other legal entity) which owns an investment interest in another real estate based investment (e.g., an LLC, a JV, a Company, a note, etc.)
• Revenue based loans, lending to low tech, profitable small businesses with high gross margins on a percent of revenue basis
• Project based loans, lending to Company short term projects with acceptable collateral and risk profiles.
• Distressed debt that can be converted to performing debt, purchased at a significant discount.

In general, the Company will invest in Assets where the Manager has experience and expertise with the location, size, collateral type, and/or other characteristics of the collateral. The Manager will rely on its internal valuation methodologies based on broker price opinions, comparable sales, appraisals, prior experience with similar properties and other types of collateral in the sole discretion of the Manager.


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