Some of the key risks investors need to consider include:
1. Capital risk. The investment in the fund is not guaranteed by capital.
RMBL mitigates capital risk:
- Maintaining conservative lending ratios
- Obtain assessments and other expert reports at appropriate intervals
- Diligent management of the loan portfolio
- Use of risk and compliance measures.
2. Interest rate risk. RMBL’s ability to achieve its investment objectives may be affected by movements in interest rates. For example, if a loan has a variable interest rate in an environment where interest rates are decreasing, the fund’s return on that instrument may be lower than the returns that may be available to investors from other fixed-rate investments.
RMBL may use its discretion whether to advance debt facilities to borrowers at fixed or variable rates, however the majority of our loans are variable.
3. Market risks. Downward changes in the real estate market may impact your ability to recover the amount owed under a loan in the event of default.
RMBL mitigates market risk:
- Maintaining conservative lending ratios
- Obtain assessments and other expert reports at appropriate intervals
- Diligent loan portfolio management
- Periodic reviews of borrowers and development projects
- Stay informed daily on changes in the real estate market.
4. Default risks. There are numerous factors that could adversely affect borrowers’ ability to meet their payment obligations or otherwise cause borrowers to default. These include, but are not limited to, changes in financial and market conditions, interest rates, government regulations or other policies, the global economic environment and changes in legislation and taxation. As a result, interest payments may be delayed or reduced for investors or result in losses to the fund.
RMBL mitigates default risk:
- Maintaining conservative lending ratios
- Obtain assessments and other expert reports at appropriate intervals
- Diligent loan portfolio management
- Regularly reviews borrowers’ circumstances and stay abreast of changes in economic, market and political conditions.
