Prefer to start with a quick video? Click here for a brief introduction to the Velocity fund, from CEO Greg Hughes.
Currently not available to investors until April of 2017.
Advanced Commission is an operating business controlled by Hughes Private Capital and is self-funded until an offering can be completed. You can review the company’s website at www.AdvancedCommission.com.
Our operating business, Advanced Commission, provides advances to real estate agents throughout the United States on a portion of their commission due for transactions pending in escrow. Advanced Commission is then repaid directly through escrow via the title company upon the close of the transaction. Investor’s capital provides the funding for these advances.
By receiving their commission in advance, Realtors are able to stabilize their cash flow and reinvest it into marketing to grow their business more quickly.
An average commission advance is $4,300 and is repaid within 42 days. The gross return per transaction is 19%, which translates into annualized gross returns ranging from 86% to 150%. In addition, our customer acquisition costs decrease dramatically over time as our loyal client base requests multiple advances every year. We focus heavily on a robust referral and reward system which aids in producing a consistent pipeline of repeat customers.
Velocity’s fund managers saw a strong need for commission advances in the real estate market and a gap in the services provided by other competitors. One large competitor plays a dominate role within the industry followed by multiple mom and pop businesses scattered throughout the United States serving very limited geographical areas.
We estimate the market to be over $300 million dollars a year in commissions with the one large competitor purchasing $1 billion over the last 16 years.
Advanced Commission’s keys to success in this industry are threefold. First, our underwriting criteria for purchasing commissions are structured to minimize any default rate to very low single digits. Second, our proprietary systems are able to track thousands of transactions efficiently and accurately. And last, our marketing expertise to initially attract clients along with our customer service organization creates long term clientele.
Velocity Fund Basics
In this 90-second video, Hughes Capital CEO Greg Hughes provides a quick look at the strategy and benefits of the Velocity fund.