FAQ's
Capital & Returns
1. What returns can I expect?
Our current pilot offers investors a target return of 22-28% APR, paid through secured, amortizing notes backed by real estate and 30% equity stake in the properties.
2. Are returns fixed or variable?
The debt portion is fixed, contractually agreed upon, and secured by each underlying property. The equity returns is variable, depending on the performance of the assets.
3. How often do I receive payments?
Investors receive payments monthly, tied to the performance of the underlying Installment Contracts.
4. Is there a preferred return?
Yes — the lender receives a fixed, preferred return before any Castle Project profit.
5. Is the investment amortized or interest-only?
The pilot structure uses amortized payments with predictable repayment schedules.
6. Can I invest less than $1.11M?
Yes — the first pilot can be co-funded by multiple investors, with minimum checks typically $250,000. There will be separate capital raising for additional pilots using Fractional, the minimum will be $20,000.
7. Can I invest in more than one pilot?
Yes — capital partners may fund multiple cohorts or scale into Castle Fund I.
Security & Collateral
8. How is my capital secured?
All investments are secured by first-position liens on each property acquired in the pilot.
9. Do I hold a lien on each property?
Yes. Each home has a recorded lien in your favor, held in trust for efficiency.
10. Who controls the trust and title?
A neutral third-party trustee holds title and documents on behalf of the investor.
11. Do I receive title insurance?
Yes — every acquisition includes lender title insurance.
12. Am I named as loss payee on hazard insurance?
Yes — you are added as loss payee on every property’s insurance policy.
13. What happens if a property becomes uninhabitable?
Insurance proceeds are used to repair, replace, or cover investor owed balances.
Buyers
14. How do you qualify buyers?
We screen for:
• Verified income
• Payment-to-income ratios (≤ 35%)
• Stable rental history
• Commitment to ownership
15. What if a buyer stops paying?
We follow a structured process: communication → cure timeline → forfeiture → resale to new buyer.
16. Do buyers handle repairs?
Yes — homes are livable, and buyers handle improvements gradually.
17. How long do buyers typically stay?
Many stay long-term; however, some refinance or pay off early after 3–7 years.
18. Do you work with first-time buyers?
Yes — most Castle buyers are rent-burdened, first-time homebuyers.
Market Selection
19. Why Peoria and Decatur?
Both cities have:
• Abundant small-dollar homes
• Strong rental demand
• Affordable pricing
• Clear, predictable legal environments
20. How did you choose pilot markets?
We use a data-driven model: affordability, default history, rental demand, and supply of livable homes.
21. Will you expand to other markets?
Yes — the roadmap includes additional Midwest and Southern cities.
Risks
22. What if the economy slows down?
The low monthly payment structure keeps affordability strong, and our underwriting focuses on stability, not credit scores.
23. What if home prices drop?
Our model does not rely on appreciation. Returns come from payments, not resale value.
24. How do you manage vacancies?
We maintain a buyer pipeline and a 3-month debt service reserve buffer.
25. What if policy changes affect evictions?
We use state-compliant Installment Contracts and operate in multiple jurisdictions to reduce exposure.
26. What happens in a repeated default?
The property is reassigned to a new buyer, and investors continue receiving payments from reserves or new buyer onboarding.
Structure & Operations
27. How does the Installment Contract work?
It is a state-regulated, fully disclosed contract where the buyer pays monthly toward ownership while Castle retains legal title until payoff.
28. Who manages servicing?
A licensed third-party servicer handles payments, escrows, notices, and reporting.
29. Do you manage escrows?
Yes — taxes and insurance are escrowed and paid through servicing.
30. What about insurance and taxes?
Servicing automatically pays these from escrow; buyers are required to maintain coverage.
31. What reports do investors receive?
Monthly portfolio statements including:
• Payment collections
• Delinquencies
• 30/60/90 reporting
• DSCR
• Property-specific notes
32. How often will I receive updates?
Monthly, plus quarterly roll-ups on pilot performance.
Big Picture / Vision
33. What is the Mount Everest Vision?
The long-term plan to scale from pilots → Castle Fund I → CastleOS → 10,000+ homes and a $500M–$1B platform valuation.
34. What is CastleOS?
Our planned technology platform for acquisitions, servicing, compliance tracking, and investor reporting.
35. Are you building a fund?
Yes — Castle Fund I is targeted for launch after 2–3 successful pilots.
36. Can I participate in future cohorts?
Absolutely — early partners receive priority access to additional pilots.
About the Castle Investment Club & Fractional
Q: What is an investment club?
An investment club is a group of people who pool their capital together to invest collectively. Club members participate in deal review, vote on investment opportunities, and share in the returns. It's a collaborative structure — not a passive investment vehicle. The Castle Investment Club is structured this way so that every member has transparency and a voice in how their capital is deployed.
Q: What is Fractional?
Fractional is a financial technology platform built alongside former SEC senior counsel that provides the legal, compliance, and back-office infrastructure for investment clubs. Fractional handles LLC formation, operating agreements, investor identity verification, profit distributions, bookkeeping, tax filings, and K-1 distribution — so club leaders can focus on sourcing and managing deals.
Q: Is the Castle Investment Club a fund or syndication?
No. The Castle Investment Club is structured as an investment club, not a fund or syndication. Club members actively participate in deal review and vote on investment opportunities. This is a fundamentally different structure from a passive fund where a general partner makes all decisions.
Q: What is the minimum investment?
The minimum investment in the Castle Investment Club is $20,000. When you commit, you will pay a 3% transaction fee to Fractional (separate from your investment amount) that covers LLC formation, legal, compliance, and payment processing. For example, a $20,000 investment would require a $600 transaction fee, for a total of $20,600.
Q: Do I need to be an accredited investor?
No. The investment club structure allows both accredited and non-accredited participants. This is one of the key advantages of the investment club model over traditional syndications, which often require accredited investor status.
Q: How do I join the Castle Investment Club?
Visit the Castle Investment Club page on Fractional and click the "Submit Your Commitment" button. You will pay the 3% transaction fee at that time to secure your spot. Once the club is fully committed, Fractional will form the LLC and prepare the Operating Agreement for all members to sign. At that point, you will fund 100% of your investment amount.
Q: What happens after I commit?
Once all commitments are received, Fractional forms the LLC and all members sign the Operating Agreement. Club leaders will then present investment opportunities that match the club's criteria. Members conduct their own due diligence and vote on whether to proceed. If a quorum is met (50%+ of ownership votes) and 60% approve, the club moves forward with the investment.
Q: How are returns distributed?
Fractional handles all disbursements from the LLC to club members automatically. During the debt repayment period, distributions are made to capital partners from the pooled servicing waterfall. Fractional also manages all tax filings and issues K-1s to each club member annually.
Q: What reporting do club members receive?
Club leaders post regular updates to a private Fractional community page. Members receive portfolio performance reports, payment status updates, and financial summaries. Fractional provides a centralized platform for document hosting, investor communication, and voting on club decisions.
Q: What fees does Fractional charge?
Fractional charges a 3% transaction fee paid by each club member at the time of commitment (minimum $6,000 total across all members). There is also an annual service fee of $3,500 per LLC that covers the private community page, automated distributions, bookkeeping, tax filings, K-1 distribution, and LLC compliance.
Q: Can I exit the club early?
The Castle Investment Club has an intended commitment period aligned with the debt repayment timeline of the pilot pool. Early exit provisions are governed by the LLC Operating Agreement, which Fractional prepares. Specific terms regarding membership interest transfers will be outlined in that agreement.
Become an Early Capital Partner
in the Castle Project
We’re currently scheduling conversations with investors lending $250,000 to $1.11M for the next pilot cohort.
Testimonials
John Doe
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Jane Doe
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OUR PILOT MARKET LOCATIONS
Decatur, IL
Peoria, IL
