Harvey Capital Funding 2025 Annual Update
A commentary on our performance during 2025
Harvey Capital Funding I LP investors,
Our net income in 2025 (which consisted of just about one quarter) was $30,741.64. After the 18% general partner earnings split, the net amount to be distributed to limited partners is $25,208.14, which represents an annualized return of 18.36% to LPs during 2025.
As a reminder, distributions will be paid monthly to LPs moving forward, so long as our previous month was profitable. Our stated goal is to achieve an annual return to LPs, net of the general partner split, between 10-15%. Below is some detail on our current portfolio and our strategy moving forward.
Portfolio composition
As of December 31, 2025, our lending portfolio comprises 10 senior-secured loans with an aggregate principal balance of $1,271,600. The portfolio maintains a conservative weighted-average After-Repair Loan-to-Value (ARLTV) of 66.52%. All current allocations are exclusively secured by single-family residential assets, ensuring a high degree of collateral consistency.
The portfolio currently carries a weighted-average interest rate of 11.61% across all positions. For our standard loans (9 out of 10), the inclusion of upfront points and fees brings the projected annualized return to between 16.54% and 23.29% at maturity. The only exception to this yield range is a single loan originated at a lower cost-basis, which is projected to return 11.85% if held to maturity.
Churn churn churn
In the private lending space, capital velocity, or churn, is the primary driver of performance. By shortening the duration of our loans, we are able to capture upfront origination and document fees more frequently, which significantly boosts our internal rate of return. Our standard 9-month product carries a 12% interest rate, a 3% origination fee, and a $700 document preparation fee. Based on our current average loan size of $130,000, this structure generates a projected annualized return of 16.72% when held to maturity.
We focus on experienced borrowers who move quickly
Now, these borrowers are highly incentivized to pay these loans off early for a few reasons:
1. Our interest rates are high and the quicker they can sell or refinance, the more profitable their project will be.
2. We have extension fees built into the notes that are not cheap, providing protection in the event that a loan goes beyond the maturity.
When a loan is paid off quickly, our annualized return on those funds deployed rises significantly. If we take the same loan scenario above and assume it’ll be paid off in 4 months instead of 9 months, the annualized return goes from 16.72% up to 22.62%.
By focusing on proven borrowers that complete rehab projects quickly and have a sense of urgency, we are able to churn capital quicker.
Selling loans on the secondary market
To further enhance capital velocity, we may strategically sell participations in our loans on the secondary market. This tactic is particularly effective when our pipeline of new lending opportunities exceeds our available liquidity.
By selling a 50% position in an existing note, we can recycle that capital into a new loan—collecting another round of upfront fees. While an extreme scenario of 12 turns a year could theoretically push returns toward 54% in the loan scenario above, our focus is on realistic, intelligent scaling. We intend to retain all servicing rights and charge a 1-2% fee to the note purchaser, effectively creating a 10-11% net yield for them while allowing us to redeploy capital into higher-yielding originations. This creates an ideal balance between spreading our risk across many loans, maintaining monthly recurring income and maximizing our internal rate of return.
Ways to invest with us
Our marketing engine has been firing on all cylinders to the point where I had to throttle back a bit because we had too much borrower demand and not enough funding. This is a great problem to have as it allows us to be selective with the projects and borrowers we lend funds to, which should mitigate risk.
With that said, we are eager to grow and have the ability to deploy funds fairly quickly. If you’re interested in investing with us, there are a couple ways to do so:
1. Limited Partner (LP) Equity Our primary vehicle is structured as a consolidated lending fund. The fund’s objective is to capture the full economic lifecycle of our lending activity, including base interest, origination points, and associated fees. Strategically, this model is designed to maximize capital velocity; as loans are repaid and capital is redeployed, the resulting fees contribute to the fund’s total earnings, which are distributed to partners on a monthly basis. This structure provides the broadest exposure to our diversified portfolio of residential notes.
2. Fixed-Income Capital Loans If you prefer a “set-and-forget” model with zero exposure to operational variables, you can loan capital directly to the fund. We offer 12–24 month terms at a fixed interest rate of 7–9%. This provides a predictable, consistent return regardless of the fund’s monthly fluctuations or capital turnover, making it an excellent alternative to traditional fixed-income products.
Miscellaneous and K-1s
Our model remains simple: we put capital to work in high-yield short-term notes and distribute the earnings every single month. If you know of anyone looking for an income-focused alternative to the public markets, please send them my way. I am focused on scaling this fund in 2026 and would welcome any introductions.
K-1s will be sent to Harvey Capital Funding I LP investors by mid-March. We do not have to wait on external tax forms, giving us full control over this process. I anticipate K-1s to be sent sooner than this, but mid-March is a conservative deadline.
Please reach out to me with any questions and our financials will be uploaded to every limited partner’s secure portal. Our next update can be expected around early to mid-April, going over results for the first quarter of 2026.
I hope you all have a great year!
In Christ,
Will Harvey III
IMPORTANT: This communication is for informational purposes only and is intended solely for the general knowledge of the recipient. It does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall any securities be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful. Any offering of securities will only be made pursuant to confidential offering material and other definitive legal documents, which must be reviewed by the prospective investor.