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12 Reasons to Invest

The purpose of these 12 sound reasons are why an accredited investor should consider investing in the Secured Investment High Yield Fund ("The Fund") if it meets their suitability requirements.

1.the Fund is structured to provide healthy returns which are hard to come by in today's economy. Because the borrowers are being charged interest rates surrounding 15%, plus origination points averaging 3-4% then one single loan (net of expenses) has the capacity to pay an investor 9%+1. Couple this with the innovative practice of reselling the whole notes and maintaining a residual interest spread over the course of a loan allows the potential for the investment to exponentially grow over the life of the fund far beyond what a single loan could provide. Check actual historical results per quarter to see what this has been. You will be pleased and want to know more how it is achieved.

2. thisisn't a stock or piece of paper that could vaporize upon bad news, but is a membership interest in an LLC that makes real estate loans backed by a first trust deed or in certain cases a second trust deed that provides tangible security to the LLC for it loans. Conservative underwriting standards are used with a sufficient up front cushion to provide protection from another down turn in the real estate sector. If the property is renovated than an even larger cushion is created. This all provides protection for your capital investment.

3. this is passive investing at its best. Unlike normal investments in single-family homes or apartment buildings where you have toilets, tenants, and trash to contend with, you supply the cash and the Fund through its manager Secured Investment Corp (the "Manager") does the rest. You don't have to pick individual loans, like you would with Cogo Capital, and worry about timely payments. You also don't have to decide on buy-out agreements if default were to occur. The Company does the heavy lifting for you.

4. quarterly cash distributions are planned. Typically to have the possibility to make double-digit returns on an investment you have to patiently wait until the very end to see any cash distributions. But borrowers pay interest monthly, which the Manager aggregates, nets, and may pay out quarterly to you based upon the actual results which you can see quarter by quarter for the life of the Fund. Then at the end of the five years you get your capital back, and any remaining earnings which are not already in your bank account.

5. you have true diversification. It is interesting how Wall Street attempts to convince you that there is diversification between owning small-cap stocks, large-cap, emerging-market stocks, and international stocks. When the stock market goes down, it seems to go down across the board to varying degrees. Even the real estate that Wall Street encourages in REIT investments is almost like a stock. The Fund is related to the economy, but has a low correlation to stocks. It should be considered as part of a portfolio for that reason alone.

6.there are systems in place and more in the works. A strong back office exists to support what the Manager sells. In the past few years a focus has been on creating the systems for growth. Underwriting guidelines were first strengthened, then the financials brought up-to-date and audited, then electronic document storage, marketing software, customer relationship software, and loan processing software. Even phone and communication software has been updated. All for the purpose of being able to smoothly and accurately work together for the good of borrowers, lenders, and investors. The Manager is actively working together to make things better.

7.the Fund leverages existing networksthat have been built up over a decade of time. For example, The Lee Arnold System of Real Estate Investing educates clients on how to make money in real estate and take out loans. This deal flow already exists and is not something the Fund has to create, so there is always ample supply to meet the demand for new loans to generate returns for the Fund investors. The Cogo Capital network of owned or franchised facilities processes the loans. And Lake Servicing services the monthly payments. All these affiliated entities talk and work with each other on a daily basis.

8.the Fund has a favorable comparison to others. For example, if you looked at Colony Capital, GTIS Partners, KKR, Oaktree or Och-Ziff you would discover that they can all raise money to the tune of $6.4B dollars, but employing it is another matter. They have only been able to place $2.0B of it in targeted assets2. Whereas the Fund can put your money to work almost immediately based upon its flow of existing deals that need funding. For accounting purposes, it doesn't earn money until the first of the month following your wire transfer, but it doesn't sit around for months in temporary investments.

9.each party shares in the upside.The Manager gets a nominal management fee of 1 ¾% then the investor gets a preferred return of 9%1. This is not a guarantee, but is a preference. Then both parties share 50/50 of the remaining amount. What a nice way to approach returns. There is incentive for each party to maximize revenues, minimize expenses, and be in a partnership arrangement for the life of the Fund.

10. even though Secured Investment Corp is a fairly young company that started in 2010,its track record is very favorable. For the period Jan 1, 2012 to September 30, 2013 there were 472 loans made for an aggregate of $34.2M with an average loan size of $73,000. The mean term length of the loan was 12 months with the average close to 16.9 months. The mean interest was 15% with the average around 14.5%. The loan to value ranged from 50-94% with the average at 55.5%. Total earnings per quarter since the Fund started have ranged from 22-34%, investor earnings from 15-21% and cash distributions from 10-15%. These are all healthy returns, with the possibility of better numbers in the future.

11. your taxes just went up on January of 2013 and you need a higher yield to make the same amount of money.Besides the maximum rate going to 39.6% the Affordable Care Act surtax on top of the regular tax rate and the alternative minimum tax rate is 3.8% of the lesser of your net investment income or the amount above the threshold trigger. Don't think this surcharge just applies to what we typically think of as interest, it also applies to capital gains on property sales and other items of passive income.

12. the employees are on fire, absolutely on fire, as is the entire Manager. There is so much talent and passion at the Manager and so much innovation going on that it is hard to describe in words. You know how important the 12th man was to the Seahawk football franchise this year in getting them to the Super Bowl; well the employees at the Manager perform the same role.

DISCLAIMER: This overview is for general informational purposes only and is not an offer to sell or a solicitation of an offer to buy any securities in SIHYF, and may not be relied upon in connection with the purchase or sale of any security. Interests in the Fund, if offered, will only be available to parties who are "accredited investors" (as defined in Rule 501 promulgated pursuant to the Securities Act of 1993, as amended). Any offering or solicitation will be made only to accredited investors pursuant to the PPM which contains more detailed information and the material risks of an investment in SIHYF, as well as the subscription documents, all of which should be read in their entirety before making a decision to invest in SIHYF.

1.The Fund pays a 9% prefered return to investors; however, there is no guarantee that an investor will earn 9%.

2.Sources: Bloomberg; and Jefferies Group.