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Jeff Bezos is perhaps best known as the founder of Amazon.com Inc. (NASDAQ:AMZN), but the billionaire has a number of lesser-known business interests across multiple industries. Through his investment company Bezos Expeditions, Bezos has made several early-stage investments in companies that have become industry leaders. Some of the more notable include Airbnb Inc. (NASDAQ:ABNB), Uber Technologies Inc. (NYSE:UBER) and, more recently, Arrived.
Arrivald has made a name for itself by fractionating the rent of single-family homes and selling shares to private investors with a minimum investment of $100. Since launching its first property in 2021, the real estate investment platform has already financed almost 400 properties and raised more than $156 million of assets under management. Bezos first invested in Arrivald during the company’s $37 million Seed Round in 2021, then doubled that investment during its 2022 Series A round.
New real estate debt fund
The company has just expanded its offering to include the Private credit fund, giving investors access to a pool of short-term real estate loans to other investors and homebuilders. Unlike a typical residential mortgage, these loans have terms ranging from six to 36 months and are used to finance real estate projects such as renovations, renovations or new home construction. The fund focuses on individual loans between $100,000 and $500,000, but will assess loan options of up to $5 million.
The fund generates cash returns by collecting interest payments on the loans and distributing them to investors. The Private Credit Fund aims for an annual return of 7% to 9%, with monthly dividend payments. The short-term nature of the loans also allows for more flexible liquidity options than many other debt funds. After six months, investors can request a repurchase of all or part of their shares.
View fund details >>
During the announcement of the Private Credit Fund, Ryan Frazier, co-founder and CEO of Arrivald, said: “We launched this new product based on direct feedback from our investor community, and we believe now is the right time to bring it to investors A number of debt investment opportunities have emerged that allow us to deliver strong risk-adjusted returns.”
Growing interest in private credit
The launch of Arrivald’s new fund comes at a time when the private credit market is experiencing significant growth, especially in the real estate sector. The current high interest rate environment and uncertainties in the stock markets have made this asset class more attractive to investors seeking high returns and low correlation with the stock market. The number of options has also increased as banks have tightened their credit requirements.
Current 30-year mortgage rates are 7.04%, and typical bridge loans range from 9.5% to 12%. With long-term government bonds yielding around 4.5%, residential real estate-backed loans offer compelling risk-adjusted returns.
Interested investors can visit the website here to view more details about the new Private Credit Fund and invest as little as $100.
This article Jeff Bezos Quietly Enters the Home Mortgage Industry, Making High-Interest Loans to Other Investors originally appeared on Benzinga.com
