Investor FAQ
Frequently Asked Questions
How does a project partnership work?
We find the deal and run the numbers. You review the full project breakdown. If you're in, you fund the partnership operating account. We execute the renovation and resale. We have monthly virtual meetings to vote on decisions but also to provide updates on your investment. When the home sells, your capital is returned first, then your preferred return, then the remaining profit is split per the operating agreement.
What's the difference between a Partner and a Lender?
A Private Money Partner provides capital in exchange for equity ownership in a specific project. You participate in the upside through a preferred return and profit split. A Private Money Lender acts more like a bank: your investment is secured by a recorded mortgage on the property and you earn a fixed interest return. We typically structure lender deals when investor capital covers the full project cost.
How is my investment protected?
Partner investments are structured through a property-specific LLC with a formal Operating Agreement covering ownership, preferred return, distributions, and exit strategy. Lender investments are secured by a promissory note and recorded mortgage, giving you a defined lien position on the property.
What kind of returns can I expect?
We target double-digit annualized returns over a 6 to 12 month period. Returns come from buying below market value, adding value through renovation, and selling at market price. All projections are estimates, not guarantees.
How are returns paid out?
Waterfall structure at sale or refinance. First: full return of your invested capital. Second: your preferred return. Third: remaining profit split between partners per the operating agreement.
Do you pool investor funds?
No. Each investment is tied to one property in one LLC. No blind pools. No commingled funds. You know exactly where your capital sits.
How long is a typical project?
4 to 12 months, acquisition through resale. Renovations themselves typically take 4 to 8 weeks. Every deal includes a projected timeline built on conservative assumptions.
What are the risks?
All real estate investments carry risk, including potential loss of capital. Primary risks: market conditions affecting resale price, renovation costs exceeding budget, timeline delays, and illiquid capital until exit. We mitigate through disciplined underwriting, contingency reserves, conservative assumptions, and active project management. We also structure multiple exit options when feasible.
Is my investment guaranteed?
No. There are no guaranteed returns. All projections are estimates. We're upfront about this because informed investors make better partners.
How do I get started?
Book a call. We want to know your goals first and how we can help you achieve them. Transparency and trust over everything. After getting to know each other and explaining what we do at Terra Nova Homes at a high level we’ll walk you through current opportunities, answer every question, and explain the process step by step. When you’re ready, you review a specific deal, sign a commitment letter, and fund the partnership account. We handle everything from there.