Brooks Acquisitions
Legal Disclosures & Risk Statements
Important legal information about investing with Brooks Acquisitions. Please read these disclosures carefully before investing.
In plain English: You’re not buying stock or a fund. You are lending money on a specific property and your loan is secured by a lien. Every investment carries risk; we do our best to mitigate that risk with conservative underwriting and strong protections.
Not an Offer Of Securities
The information contained on this website and in related materials does not constitute an offer to sell or a solicitation of an offer to buy securities. The investment opportunities described herein are private lending arrangements secured by real property, not securities offerings.
Brooks Acquisitions facilitates private money lending transactions where individual lenders provide capital secured by promissory notes and security deeds (or deeds of trust) on real property. These are direct lending relationships between the lender and borrower, not pooled investments or securities.
No offering materials, including this website, have been reviewed or approved by any securities regulatory authority. This is because we are not offering securities—we are facilitating private real estate loans between private parties.
Investment Risks
WARNING: Private real estate lending involves significant risk, including possible loss of principal. You should not invest money you cannot afford to lose or that you may need in the short term.
No Guaranteed Returns
While we project returns based on our underwriting and market analysis, there is no guarantee that you will receive any returns or recover your principal investment. Real estate values can decline, properties may not sell for anticipated prices, and borrowers may default on their obligations.
Market Risks
Real estate markets are cyclical and subject to economic conditions beyond our control. Property values, rental rates, days on market, and buyer demand can all fluctuate. A downturn in the real estate market could negatively impact your investment.
Illiquidity Risk
Your investment capital will be tied up for the duration of the loan term, typically 6-24 months. There is no secondary market for these loans, and early exit may not be possible. You should only invest capital that you do not need access to during the loan term.
Default and Foreclosure Risk
The borrower may default on their obligations under the promissory note. While your investment is secured by the property, foreclosure proceedings can be time-consuming, expensive, and may not result in full recovery of your investment. Junior lien positions (2nd liens) carry additional risk as senior lenders are paid first.
Property-Specific Risks
Each property carries unique risks including: unexpected renovation costs, title defects, environmental issues, permitting problems, contractor delays, damage to the property, neighborhood deterioration, and zoning changes. These factors can negatively impact project timelines and profitability.
No FDIC Insurance
Private money loans are not insured by the FDIC or any other governmental agency. You could lose your entire investment. However I do have E&O insurance and each property will have an insurance policy.
How Private Lending is Structured
Private real estate lending is a legal and established form of investment that has existed for centuries. When you invest with Brooks Acquisitions, you are entering into a private lending relationship secured by real property:
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Promissory Note: A legally binding contract between you (lender) and the borrower outlining loan amount, interest rate, term, and repayment obligations.
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Security Deed/Deed of Trust: Recorded lien on the property securing your loan. If the borrower defaults, you have the legal right to foreclose and take ownership of the property.
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Title Insurance: Protects your lien position against title defects or claims against the property.
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Property Insurance: Protects the physical asset with you named as loss payee.
All legal documents are prepared by licensed attorneys, and liens are recorded in the appropriate county land records, creating a public record of your secured interest in the property.
Accredited Investor Status
For most private lending opportunities with Brooks Capital, accredited investor status is NOT required because you are making a private loan secured by real property, not purchasing a security.
However, certain pooled investments or syndicated deals may require accreditation under securities regulations. We will clearly disclose whether accreditation is required for any specific investment opportunity.
An accredited investor is generally defined as someone with:
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Annual income exceeding $200,000 (or $300,000 jointly with spouse) in each of the prior two years with expectation of the same this year, OR
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Net worth exceeding $1,000,000 (excluding primary residence), OR
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Certain professional certifications or licenses
Tax Considerations
Brooks Acquisitions does not provide tax advice. You should consult with your own tax advisor or CPA regarding the tax treatment of interest income from private lending.
Generally, interest income is taxed as ordinary income. You will receive IRS Form 1099-INT for interest earned. There may be tax-advantaged strategies available such as investing through a self-directed IRA (traditional or Roth), but you must discuss these options with your tax professional.
Forward-Looking Statements
This website and related materials contain forward-looking statements regarding projected returns, timelines, property values, and market conditions. These are estimates based on our analysis and experience but are not guarantees of future performance.
Actual results may differ materially from projections due to market conditions, unexpected costs, delays, changes in regulations, or other factors beyond our control. Past performance is not indicative of future results.
Professional Advise Recommended
Before making any investment decision, you should:
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Consult with your attorney regarding the legal structure and your rights
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Consult with your CPA or tax advisor regarding tax implications
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Consult with your financial advisor to ensure this investment fits your portfolio
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Conduct your own due diligence on each investment opportunity
Brooks Acquisitions and Trey Brooks are not attorneys, CPAs, or licensed financial advisors and cannot provide legal, tax, or financial planning advice.