VonFinch Fixed Income Fund I
Debt Fund
The VonFinch Debt Fund offers fixed-income investments through real estate-backed loans, targeting steady, predictable returns with multilayer security measures. This fund provides an opportunity to invest in structured debt (bridge and mezzanine) with a focus on capital preservation.
Investing Simplified - Deal Summary
(See Key Terms tab above for explanations of words in bold & italics)
The VonFinch Fixed-Income Private Debt Fund is a real estate-backed debt fund designed to deliver predictable monthly income with fixed annual returns of 10–12%. It leverages secured loans, diverse markets, and a multi-layered risk mitigation strategy to provide stable cash flow over 2–5 year terms.
Debt investments like this are generally considered safer than equity investments ( both public and private equity) because they hold the first position lien in a capital stack. This means they are repaid first if something goes wrong. However, debt funds don’t offer tax benefits, and the potential for higher earnings is limited compared to equity investments.
Investing in public debt bonds on the stock market is similarly safe but typically yields lower returns compared to private funds like this. The additional benefit of investing in private debt funds is that investors can explore the lending strategy more thoroughly by engaging with the sponsor. These funds also often have a more niche focus, which may help mitigate some risks.
Uniquely, this debt fund by VonFinch is primarily used to finance their own assets. This means the funds are utilized to close the gap between primary bank debt and common equity or as fast bridge capital for acquisitions, remodels, and other initiatives. On the positive side, the debt note is collateralized by the entire VonFinch portfolio, which has a strong history of success. On the negative side, there is naturally less diversification in who is being lent to, which could be seen as either a risk or a benefit, depending on your perspective.
The VF Fixed Income Fund is ideal for investors who want steady income, lower risk, and simplicity, without chasing the higher risk and potential upside of real estate equity or stocks. At 10-12% you are getting best of market debt fund yields, which makes this a great option for dividend income investment.
Capital Stack Representation: This investment is "Senior Debt" & "Mezzanine Debt"
This fund structures returns very simply with 0 management fees.
Class 1 Investors ( investments 100k - 1M ) - 10% return dividend
Class 2 Investors (investments 1M+) - 12% return dividend
Projected Returns Example Table
Class 1 - $100,000 assumption
- $10,000 per year
Class 2 - $1,000,000 assumption
- $120,000 per year
Investing Simplified - Key Terms
- Lien - a lien is a legal claim on property to ensure the debt obligation is fulfilled
- Term - a 2-5 year term is the length of time a borrower has to repay the loan.
- Private Equity - Holding a common equity position in a private fund or company
- Public Equity - Holding a common equity position in a public company i.e on the stock market.
- Bonds - a public debt instrument on the stock market Issued by federal, state, or municipal governments or corporate bonds Issued by publicly traded companies.
- Private Debt - A private company that pools money from investors to lend to borrowers.
- Bridge Loan - a debt instrument (or loan) that is typically used to bridge the gap between immediate financial needs and long term financing. Bridge loans tend to be executed more quickly thus charge a premium interest rate.
- Collateralized - Collateral is as asset of value used to repay the lender if the borrower defaults ( fails to pay the loan) this can be cash, equity in other properties or anything else the lender deems sufficient.
Strong Predictable Income with Flexible Terms
Offers 10–12% fixed annual returns for stable cash flow, with monthly payouts or compounding options for either growth or regular income.
Multilayer Security Reduces Risk
Loans are secured by trust deeds or cross-collateralization with a 75% loan-to-value cap, ensuring asset-backed protection. The sponsor’s portfolio, valued at over $100M, backs the loans for an additional safety net. Interest guarantees ensure investors get paid even in cases of default or delays, reinforcing reliable cash flow.
No Management Fees Maximize Returns
With a 0% management fee model, earnings flow directly to investors without additional layers of cost.
Lower Risk Than Equity Investments
Debt investors have priority in default scenarios, reducing downside exposure compared to equity positions.
Flexible Terms for Different Investors
Investment timelines vary from 2 to 5 years, allowing alignment with personal strategies. Tiered structures reward larger investments with stronger yields—Class I (starting at $100K) provides fixed returns, while Class II (starting at $1M) offers higher yield opportunities for institutional participants.
Geographic and Loan Diversification
The portfolio spans Iowa, Kansas, Missouri, Nebraska, and Colorado, mitigating regional risk. A variety of loan types further reduces concentration risks.
Proven Management Team
VonFinch and VareCo collectively manage over $200M, demonstrating deep expertise in both debt and multifamily strategies.
Illiquidity
Requires 2–5 year commitments with no secondary market for early exits, making it best for long-term investors.
Sponsor’s Primary Focus
Funds primarily finance the sponsor’s own deals, focusing on bridge and mezzanine loans, which could limit diversification into unrelated projects and concentrate risk.
Higher Leverage Risks
While 75% LTV is generally safe, some loans may go up to 90% LTV, adding additional risk despite cross-collateralization.
No Tax Advantages
Unlike equity investments, debt funds do not offer tax benefits such as depreciation or cost segregation, although they generally provide safer, consistent returns.
Who Should Consider This Investment?
The VonFinch Fixed-Income Private Debt Fund provides predictable income, real estate-backed security, and lower-risk fixed returns (10–12%). Its multi-layered risk protection, zero management fees, and flexible terms make it ideal for income-focused investors seeking capital preservation.
While it lacks tax benefits and liquidity, the proven management team, strong collateralization, and geographic diversification position this fund as a reliable, lower-risk alternative to equity investments. While the fund is primarily utilized for the sponsors own deals creating some risk concetration and bias, the returns are strong.
- Income-Focused Investors – Prioritize monthly cash flow with predictable returns (10–12%).
- Risk-Averse Investors – Prefer asset-backed loans and lower risk over speculative growth.
- Tax-Neutral Investors – Do not rely on tax deductions but value consistent income.
- Institutional or High-Net-Worth Investors – Able to meet higher minimum investments for stable returns.