Frequently Asked Questions

When I invest with Houses on Hudson do I own interest in property?

When you invest in a Houses on Hudson rehab project, you hold a promissory note to receive interest payments for a stated rate and a stated term. Your investment is returned to you within the term of the
note. Your promissory note is secured by the underlying property and gives you a shared-interest with
other investors in the property. Much like a bank holding mortgage on a home, you, the promissory note-holder are not on the title or have interest in operations of the project.

What interest does my investment earn? How is it calculated?

At present our rehab projects allow us to give our investors between 10%-12% annual interest. Interest is calculated on a daily compounding basis to yield higher effective rates.

What is the duration of my investment?

Promissory note terms generally range from 1 to 12 months with option to re-pay your investment back early at any time. Since our properties are sold at market rate within 6-8 months of purchase, this allows us to return your investment sooner and move to the next project.

Can I get my investment back at any time?

Real estate investment is not liquid like cash or securities. Your principal invested is paid back at the end of the loan term or sooner depending on the project.

How are you able to offer this high rate on my investment?

Our projects are picked after meticulous due diligence and analysis on expected returns and risks involved. We strive to deliver an increase in after improved value to our properties; this allows us to
offer higher than market rates.

When is interest paid?

Monthly interest distributions are paid by the 5th of each month for the prior month. Monthly interest begins to accrue when an investor’s funds clear into our account. Interest payments are pro-rated for days in month for initial and final months of investment.

Are these investments risky?

Yes, much like investing in stocks, there are risks with investing in real estate. We do our to mitigate risks. We see the present economic conditions of real estate market as favorable for rehab and re-sell projects. These conditions could change and it is difficult for us to predict the drivers of these economic conditions. Real estate investments should be seen as part of a diverse portfolio.

What if there is a collapse in property values?

We see the current market to be in an expansion mode, especially in the Hudson County, NJ area. Our Neighborhood is set to grow and there is projected to be a shortage of housing. Our own skin is in the
game and we believe the risk of a collapse in property values is not likely to happen.

We mitigate risk by careful due diligence before we invest in any project and have multiple exit strategies on our projects-

– We re-sell completed projects at market rate.
– We re-finance completed projects and pay off our investors.
– We hold property in our portfolio of rental income properties with other investors

What happens to my investment if you default on my loan?

We make considerable effort to keep risk of loan default to a minimum. All investments have some amount of risk including the risk of loss of investment. In case of a worst case scenario, property will be sold at a lower than expected rate and investors re-coup part of their investment.

What if more money is needed for a project?

We factor in cost over-runs to our budget. We are positioned to fund any project to bring it to completion with any one of our vetted contractors and sell property at market rate.

What information is available about each project?

Our terms are transparent and we provide information on due diligence to our investors. We also provide information on the project as it develops.

What are the tax implications of investing as a note-holder?

Interest distributions are taxable to investors. We require a form W-9, Request for Tax payer Identification and Certification. We issue Form 1099-INT Interest Income to all investors. Please consult your tax advisor if you are unsure on how to report interest income paid.