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How does Arrived manage risk for the Private Credit Fund?
How does Arrived manage risk for the Private Credit Fund?
Korin Hedlund avatar
Written by Korin Hedlund
Updated over 6 months ago

Managing Risk

Real estate debt investments offer enticing prospects for returns but also carry inherent risks. The Arrived Private Credit Fund recognizes the importance of diligent risk management to safeguard investor capital and optimize long-term performance. Here's how the fund addresses various risks:

Renovation Risk

One of the primary risks associated with real estate projects is the uncertainty surrounding renovations or rehabilitation phases. The Arrived Private Credit Fund tackles this risk head-on by implementing rigorous due diligence processes for each project. Before extending financing, the fund evaluates the viability and feasibility of renovation plans, scrutinizing factors such as project scope, budgeting, and the track record of the project team. Additionally, the fund may incorporate contingency plans and performance milestones to ensure projects stay on track and mitigate the risk of delays or cost overruns. By adopting these measures, the fund aims to minimize renovation-related risks and enhance the likelihood of successful project completion.

Market Risk

Real estate markets are inherently dynamic and susceptible to economic, social, and geopolitical fluctuations. The Arrived Private Credit Fund maintains a vigilant stance on market trends and indicators to navigate potential market volatility. The fund remains attuned to supply and demand dynamic shifts, interest rate movements, and macroeconomic conditions through continuous monitoring and analysis. Armed with this insight, the fund can proactively adjust its investment strategies and allocation decisions to capitalize on emerging opportunities or mitigate risks posed by adverse market conditions.

Borrower Risk

Partnering with experienced and creditworthy borrowers is crucial to mitigating borrower-related risks in real estate debt investments. The Arrived Private Credit Fund prioritizes collaboration with reputable borrowers with a proven track record of successful projects and timely loan repayments. By conducting thorough borrower due diligence and assessing factors such as financial stability, past performance, and industry reputation, the fund seeks to minimize the risk of default or non-performance. The fund also diversifies its loan portfolios across various borrowers, projects, and geographic regions to reduce exposure to borrower-specific risks.

The Arrived Private Credit Fund is open to all accredited and non accredited investors, starting with a minimum investment of $100. Investors can take advantage of monthly dividends and increased liquidity. Get started today.

For more details, check out Introducing the Arrived Private Credit Fund.

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