The Terra Secured Income Funds make loans secured by commercial real estate and pay interest received from those loans to investors. These funds were created to provide investors with income, specifically the high interest rates that became available when traditional lenders lost capital in the market decline and were forced to scale back their own commercial lending.
Terra originates its own mortgage loans and does not purchase existing loans. Generally Terra's are "mezzanine" loans, meaning senior to the borrowers's equity and junior to a first loan. All of them meet strict underwriting criteria created by Terra to preserve and protect capital. Over the last decade, Terra Capital Partners, the fund's sponsor, has made more than $2 billion of mezzanine loans, generating returns in excess of 9% without losses.