Frequently Asked Questions
Why invest with National Secondary?
- Earn 10% per annum interest rate, payable quarterly.1
- Collateralized by of the Real Estate Loan Portfolios, as described in
- The Private Placement Memorandum
Market Commentary
The current economic climate including inflation and recession fears, as well as rising interest rates, has investors asking where to invest now?
Investors are looking for shorter-duration investments, yet the desire for high yield still remains. Investment options with a short or shorter term than traditional real estate projects and high yield are of particular interest as investors seek places to ride out the economic uncertainty.
While short-term and high yields don’t typically go hand in hand, changes in interest rates and the underlying real estate market have created market dynamics not seen in other economic cycles.
Options available include high-yield corporate bonds, private debt funds, and short-term notes among others. Maturities of 18 to 36 months seem popular with investors seeking yield in the short term but wanting liquidity to coincide with improving market conditions.
It’s important for investors seeking high yield and short-term to pay close attention to the collateral behind these investments or how they have been secured as well as a thorough review of offering documents.
Market conditions have investors looking for the best of both worlds, however, they should understand that investments with higher yields may be considered riskier investments, and success is not guaranteed.
We invite you to register for access to review the offering materials for the National Secondary with a 10% fixed interest rate.
What is National Secondary
National Secondary offers accredited investors an opportunity to invest directly into lending portfolios that are approved, insured, and guaranteed by Fannie Mae and Freddie Mac in the form of a collateralized note that will earn passive income via a fixed annual interest rate of 10%, paid quarterly.
How do I get started as an investor with National Secondary ?
Click one of the buttons above depending on which type of investor you are! The entire account creation and investment process are completed online. You will be prompted to provide or verify any required information, as well as make the necessary acknowledgments electronically.
Am I an accredited Investor?
An accredited investor, in the context of a natural person, includes anyone who:
- Has earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current calendar year, OR
- Has a net worth over $1 million, either alone or together with a spouse or spousal equivalent (excluding the value of the person’s primary residence), OR
- Holds good standing a Series 7, 65, or 82 license
On the income test, the person must satisfy the thresholds for the prior two years consistently either alone or with a spouse, and cannot, for example, satisfy one year based on individual income and the next two years based on joint income with a spouse. The only exception is if a person is married within this period. The person may satisfy the threshold based on joint income for the years during which the person was married and based on individual income for the other years.
In addition, entities such as banks, partnerships, corporations, nonprofits, and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:
- Any trust with total assets of more than $5 million, not formed to specifically purchase the subject securities, and whose purchase is directed by a sophisticated person, OR
- A certain entity with total investments of more than $5 million, not formed to specifically purchase the subject securities, OR
- Any entity in which all the equity owners are accredited investors.
In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
Why is it called a “Secured Creditor Real Estate Portfolios”?
Can I invest through my IRA?
If you have an existing IRA or a 401K from a previous employer, it is likely that you will be able to self-direct all or a portion of it into our investment vehicles. Check with your current custodian to see if they will allow you to self-direct your retirement account.
If the answer is no, please contact a member of our investor relations team by email at info@natsec.com, call or text us at (800) 734-4985, and we will introduce you to the custodian that we work with that will allow you to invest in alternative assets using your retirement funds.
What type of tax documents will receive?
That depends on which vehicle you decide to invest in. If you invest in our new accredited fund, you will receive a Form K-1. A Form K-1 is a tax form used by partnerships to provide investors with detailed information on their share of a partnership’s taxable income.
Our goal is to finalize all Form K-1s annually by March 31st, however, we do rely on outside reporting and may require additional time to furnish the forms in a way that is to the investor’s best advantage.
Accordingly, you may be required to obtain one or more extensions for filing federal, state, and local tax returns, but that is not our intention.
If you invest in our new non-accredited vehicle, you will receive a Form 1099-DIV.
A Form 1099-DIV is a tax form that records income earned from entities or persons other than your employer. Our non-accredited vehicle, will record the number of distributions you receive and whether those distributions are income or a return of capital.
We will provide you with a Form 1099-DIV by January 31st each year.
Can I invest if I live in another country
Is National Secondary a short-term investment?
Definitions of short-term offerings vary. The term of our vehicles is generally 1 year. Many traditional real estate offerings have investment hold periods of 5 years or more.
Is this a short-term note or secured note?
Though definitions of short-term vary, National Secondary issues a collateralized note earning the investor passive income at a fixed rate through a term of 12 months – As a creditor of National Secondary the maturity date of your investment is determined by the inception and execution date of the secured note issued by National Secondary.
What is the intended use of the capital being raised by the fund?
What type of investment is this? Is this similar to a corporate or high yield bond?
Is the investor charged any fees, commissions, or expenses for this investment?
Is the 10% annual interest rate a targeted internal rate of return (IRR)?
When will investors’ capital investment be returned?
How long has National Secondary been in business? And what is your track record?
Is National Secondary considered crowdfunding?
What Happens if anyone retires or passes away?
That is a great question! We should discuss the reality of that situation. The National Secondary Team is comprised of attorneys and consultants, if anyone should pass the succession plan allows for a senior manager to step in to manage cash flow and distributions to investors. We have a great team at National Secondary with an excellent third-party administrator and broker-dealer. Together the team will continue with business as usual maximizing the value of your investment.
How often will I receive interest payments?
We intend to distribute interest payments quarterly.
Is there risk Involved?
All investments involve risk, including those investments made in National Secondary. We do not guarantee that you will earn our targeted returns. There are many factors that can impact the performance of your investment, many of which are not under our control. Please keep in mind, investing involves risk and may result in partial or total loss of your investment. Prospective investors should carefully consider investment objectives, risks, charges, and expenses, and should consult with a tax or legal adviser before making any investment decision.
As an additional shield of protection as well as creditors National Secondary has information regarding an investment methodology that can secure all or part of an investment against potential loss or diminution in value. As a result, we are able to implement capital structures that reduce risks and volatility, and protect against downside losses, while generating attractive yields.
We arrange the collateralization of invested capital irrespective of the performance of any business. You don’t worry about business failure, stock market, bond market, global market, real estate market, or any market a portion of each investment can be allocated to acquire hedge assets that mature for up to 100% of the original investment.
However, we believe that investing in real estate portfolios poses less risk than many other types of investments real estate loan portfolios have historically been less volatile than the stock market, Additionally, our proprietary technological software integrates with non-banked lending institutions across the country identifying and evaluating plausible institutional loan portfolio acquisition opportunities for our investors allowing our team of experienced aggregators, the data analyzation points necessary to offer accredited investors the opportunity to invest directly into the acquisition of lending portfolios that are approved, insured, guaranteed, and acquired by Fannie Mae, Freddie Mac, or other large marketplace institutional buyers.