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Institutional investors often have unique opportunities not available to most people, including the $36 trillion equity market.
In 2024 alone, $1.1 billion in equity agreement (HEA)-backed securitizations received ratings from major agencies DBRS Morningstar, validating HEAs as a legitimate institutional asset class.
This securitization market is expected to grow to over $2.5 billion in 2025.One company, s, has found a way to capitalize on this underutilized pool of owner wealth, and they’re letting individual accredited investors get in on the action.
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Equity Fund I, a first-of-its-kind real estate investment fund managed by s’ affiliated company, Nada Asset Management (Nada), has built a portfolio of more than $10 million in Equity Agreements (HEA), viding institutional-grade access and structure to equity .
Through a diversified pool of HEAs, the fund offers investors exposure to residential real estate appreciation while limiting downside risk through capped exposure and asset-level diversification.
The fund is s’ venture in equity . Since 2022, Nada has dered realized payoffs on more than 40 equity investments with a 16% weighted average Internal Rate of Return (IRR).
Investors in the fund can take advantage of:National diversification across hundreds of pertiesEnhanced portfolio efficiency through direct sourcing and underwriting of each investmentBuilt-in risk tection through structured agreements that can withstand significant market fluctuationsTarget returns of 14-17% net IRRfessional management by Nada’s experienced team that has transacted over $100M in gross asset valueInvestments can be easily made on Nada’s real estate investment platform, s.
Minimum investment of $25,000.
How s Works, And How Your Money Is tected An HEA is a contractual agreement in which an investor vides a owner with a lump sum of cash in exchange for a portion of a ’s future value. U.S.
Equity Fund I (HEF) vides the cash to owners in exchange for a percentage of the ’s future value.
The fund generates a return when an HEA reaches a liquidity event, either by the owner selling the or refinancing their mortgage and paying off the HEA.Each HEA is typically structured with a 1.85 exchange rate to give investors built-in downside tection while maintaining attractive upside potential.
For example, if HEF invests $100,000 in a perty, the fund may be entitled to $185,000 of the ’s future value upon exit (subject to annualized caps).
This built-in exchange rate establishes a favorable entry point, creating a cushion against moderate housing declines.
Even if the ’s value falls, HEF is still ly to recover their capital or realize a modest return because of the discounted effective purchase price embedded in the 1.85 rate.
Only in significant downturns would losses materialize, and even then, the owner’s retained equity absorbs part of the impact.
Additionally, HEA-backed securities aren’t tied to macroeconomic trends interest rate volatility, refinancing cycles, and lease-up delays.
HEA performances are tied directly to the underlying residential perty values and owner behavior. And un traditional real estate investments, there’s no third-party manager.
The owner assumes responsibility for maintenance, repairs, taxes, and upkeep, and because it’s their , they’re often more invested in maintaining and imving the perty.This independence not only reduces portfolio correlation, but also vides yield-seeking investors with a growth opportunity that behaves differently than conventional private equity or real estate exposures, serving as a natural hedge against broader market volatility.In essence, HEAs allow investors to capture equity- growth in residential real estate while avoiding many of the market-driven risks that challenge traditional leveraged growth strategies.Schedule a Call With s Today Disclaimer: Please be advised that alternative investments carry a risk of monetary loss.
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