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Important information about the Public Offering Managed Tax Lien Fund
Including Definition of Terms, Plan of Operation, about the Managing Member, and a partial list of Suitability Requirements
R. E. TAX LIEN FUND I, LLC (the "Company") is a Nevada limited liability company of which R. E. Tax Lien Partnership, Inc. is the managing member. The Company hereby offers, on a best efforts basis (the "Offering"), up to 80 Class A Membership Units at $12,500 each unit. The Company has been formed to acquire real estate property tax lien certificates and redeemable tax deed certificates, to administer such liens and deeds, to reinvest the proceeds from the early redemption of such liens and deeds, to foreclose on all profitable non-redeemed liens, to renovate foreclosed property if needed and to profit from the sale of the acquired property.
Managing Member: The Managing Member of the Company is R. E. Tax Lien Partnership, Inc, a Nevada corporation whose address is the same as the Fund I, LLC, at 3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89109 and whose telephone number is ( 702 ) 990-3841. R. E. Tax Lien Partnership, Inc. was incorporated on October 15, 2003. The President of the Partnership is David Todd Zussman.
DEFINITIONS OF TERMS
Foreclosed property: Any real property acquired by the Company as a result of foreclosure due to non-redemption of liens.
Liens: Tax Lien Certificates ("Liens") or Redeemable Deed Certificates ("deeds") relating to real property which fully secures the payment of real property taxes attributed to such real property. The liens or deeds are issued by various local county governmental agencies throughout the United States. All liens are first priority liens on the real property to which they attach and are ahead of the first mortgage.
It is anticipated that the Company will acquire mostly Tax Lien Certificates as there are only four states that offer Redeemable Deed Certificates. Some liens may be acquired as over-the-counter ("OTC") assignment. These are generally liens which were not sold at the local county government's public auction and so are assigned to a county governmental agency to be used or held in inventory and liquidated to interested OTC buyers.
Class A Member: An Investor who purchases at least 1 Unit is a Class A Member and whose subscription agreement is accepted by the Company.
Unit: Represents a Class A Member's ownership interest in the Company. There shall be a total of 80 Units available. Each Unit represents an 1.25% ownership interest in Class A Membership and shall represent a capital contribution of $12,500 per unit to the Company.
PLAN OF OPERATION
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The Company intends to purchase liens offered by various local county governmental agencies located throughout the United States. All of the capiatl (but not the earned interest and penalties) received from the redemption (i.e. early payoff) of the liens within the first three years of the Company will be reinvested into other liens.
After the three year period or possibly the optional fourth year of the Company term, there will not be any further reinvestment into other liens. All earned interest and penalties received by the Company from the early redemption of liens will be distributed every 90 days throughout the terms of this fund as Cash Available for Distribution. After the third year or possibly the optional fourth year the Company will become self liquidating. This means as proceeds are received from the early redemption of liens or the sale of foreclosed properties they will be distributed in accordance with the terms of this offering.
With respect to those liens that are not redeemed, the Managing Member will foreclose on all profitable liens. All interest and penalties received will be distributed 100% to the Class A Members. In the event that the Managing Member forecloses, then it will use Company capital funds to obtain possession, clear title, renovate, and make the foreclosed property ready for sale, will market and sell the property and will distribute the net proceeds 75% to the Class A Members and 25% to the Managing Member.
Any distribution to the Managing Member will not be made until the Class A Members have received back first in the aggregate, from all prior distributions a return of their initial investment capital plus an amount thereon equal to 6% per annum simple interest.
The Company has entered into an escrow agreement with Southwest Title located at 8215 S. Eastern Avenue, Suite 100, Las Vegas, Nevada 89123, pursuant to which it will receive and hold the gross proceeds of the offering until the minimum eight (8) Units have been sold (the "Impound Level").
The Managing Member and its affiliates did purchase Units that met the minimum purchase requirements of eight Units, investing $100,000 into the Fund 1, LLC. Southwest Title will continue to hold the Company lien certificate. The Fund 1, LLC currently uses Bank of the West on Eastern Ave. and Tropicana in Las Vegas, Nevada, to hold all investors capital. The 8 Units minimum has been sold already. David Todd Zussman purchased four units for $50,000.
After the Impound Level was reached, the proceeds held in escrow, together with any interest earned thereon and all amounts subsequently received, shall be deposited in the general fund account at Bank of the West for the Company to be used only for the purposes described herein.
PARTIAL LIST OF SUITABILITY REQUIREMENTS
Purchaser must be 18 years of age or older or that a bona fide trust has been setup if Purchaser is a minor.
Purchaser must have during the current tax year a minimum gross income of $75,000 and a minimum net worth of $75,000 exclusive of home, home furnishings and automobiles; or, in the alternative, a minimum net worth, exclusive of home, home furnishings and automobiles of $300,000.