New Silver is a US fintech lender that makes hard money loans to real estate investors for fix-and-flip, rental and ground-up projects. Its investment arm, the New Silver Income Fund, lets accredited investors put money into a pool of those loans and earn monthly income. It is not open to everyone: the minimum is $50,000.
At a glance
| What it is | A private fund that invests in short-term real estate loans |
| How you earn | Monthly income from loan interest |
| Who can invest | Accredited investors only |
| Minimum | $50,000 |
| Target return | 12% to 14% net a year, per New Silver |
| Liquidity | Quarterly redemptions, no lockup, per New Silver |
How it works
New Silver lends to property investors who need fast financing, usually to buy and renovate a home. These are first-lien loans, which means the property secures the debt. The Income Fund pools investor money and lends it out. Borrowers pay interest, and the fund passes income to investors.
New Silver says the fund targets a 12% preferred return paid monthly and 12% to 14% net a year. It lists a three-year average net return of about 14.86%. Past results don’t guarantee future ones.
Who can invest
The offering is made under Regulation D, Rule 506(c), and is open only to accredited investors. In the US that broadly means meeting income or net worth thresholds set by the SEC, and you’ll need to verify your status. Investors receive a Schedule K-1 for taxes.
Risks to understand
Hard money loans pay well because they carry risk. Borrowers can default, property values can fall and renovation projects can run over budget. A first lien helps, but recovering money through foreclosure takes time. The fund isn’t FDIC insured. Redemptions are quarterly, so you can’t pull money out at any moment, and in stressed markets private funds can limit redemptions. Read the offering memorandum, including all fees, before investing.
The old card versus today
Older listings described New Silver as a way for anyone to “invest in hard money loans” at around 9% to 11%. That’s out of date. Today the investor product is the Income Fund, with a high minimum and accredited-only access. If you don’t qualify, real estate platforms with low minimums are a better fit.
How the fund makes money
Hard money lenders charge higher rates than banks because they lend fast, often within days, and to projects banks avoid, such as homes that need major renovation. Borrowers accept the cost because speed lets them win deals. Loans are short, often 12 to 24 months, so capital turns over and the fund can relend at current rates. The interest borrowers pay, minus the fund’s costs, becomes investor income.
Questions to ask before investing
Ask how many loans the fund holds and how concentrated they are by state and borrower. Ask about the default rate, how many loans are in foreclosure and how losses have been handled. Ask for the full fee schedule and how redemptions work when many investors want out at once. A good fund manager will answer clearly and in writing.
How it fits a portfolio
Private real estate debt behaves differently from stocks, which is why some investors use it to diversify. But it shouldn’t be a large share of your money. Keep enough in cash and liquid investments to cover emergencies, and size any private fund so a delay in redemptions wouldn’t cause problems.
Owen’s take
This is a serious investment, not a side hustle for beginners. The target returns are attractive, but the $50,000 minimum and accredited-only rule put it out of reach for most readers. If you qualify, treat it as one slice of a diversified portfolio, read the memorandum closely and talk to a financial adviser first.
Who it suits
It suits accredited investors who want monthly income from real estate debt and can leave money invested for the long term. It suits less well beginners, small investors or anyone who may need quick access to their money.
Similar options
- Fundrise offers real estate funds from a $10 minimum, open to non-accredited investors.
- Prosper lets you fund personal loans from $25 per note.
- Betterment is a robo-adviser for diversified, hands-off investing.
More options are in Passive Income.
Pros and cons
Pros
- Monthly income from loan interest
- Loans secured by first liens on property
- Quarterly redemptions with no lockup
Cons
- Accredited investors only
- $50,000 minimum
- Real estate and default risk; not insured
FAQ
Can anyone invest with New Silver?
No. The Income Fund is open only to accredited investors.
What’s the minimum investment?
$50,000, according to New Silver’s investor page.
What returns does New Silver target?
New Silver states a 12% to 14% net annual target. Returns aren’t guaranteed.
Can I withdraw at any time?
Redemptions are quarterly. Check the offering documents for any limits.
How is New Silver Income Fund taxed?
Investors receive a Schedule K-1 each year. Ask a tax adviser how the income is treated for you.
