As you invest in the Flywheel, you’re diversifying into 300+ assets with varying maturity dates of 6-24 months, with the vast majority of assets in the Flywheel on a deferred repayment cycle. Repayments that you see earlier than that 6-24 months are likely early repayments, and in the bigger picture, will have repaid less interest than if it went the full duration. Early repayments, delayed repayments and repayments processed on time are all taken into consideration with our target annualized return rate of 9%.
Another way to think about it is similar to purchasing an individual LRO on our platform. If the projected return rate is 9%, and it repays after a month, you would not receive the full interest, because the LRO was repaid early. The Flywheel is the equivalent, but on a much larger scale. The ideal scenario is that the assets in the Flywheel are repaid at maturity (6-24 months) for full interest to be collected.
For clients with reinvestment into the Flywheel, we will continue to add new assets with new maturity dates into the Flywheel, and the initial ramp period of about one year for the larger repayments. The reason being is the varying maturity dates of the hundreds and thousands of assets you’ve invested into the Flywheel over the years will become consistent as time goes on. If you can imagine a “flywheel” in context, it continues to “turn”, generating repayments that can be reinvested and continue growing. In situations where the underlying real estate projects take longer to complete than scheduled, they will continue to collect interest. We do all the work, and you get all the reward.
For those that have paused reinvestment, you will see the repayment total volume and repayment $ increase after the one year mark of investment. Repayments will continue every Thursday on a weekly basis, as long as assets have repaid. Keep in mind, in the third year, you will begin to see repayments slow again because a large percentage of assets in the Flywheel will have already been repaid.
For those that have recently invested in the Flywheel and have not reached the one year mark since your first investment, once you reach that one year mark is when you can expect to see repayments really pick up.