What is a First Position Lien?

Understanding Your Security in Real Estate Investments with AJX Capital

When you invest in real estate-backed loans, one of the most important terms you’ll come across is the “first position lien.” At AJX Capital, we prioritize transparency and education so our investors can make informed decisions—and understanding lien positions is a key part of protecting your capital.

💼 What Is a Lien in Real Estate?

A lien is a legal claim or right against a property, typically used as collateral to secure a loan. When a borrower takes out a loan, a lien is placed on the property so that if the borrower defaults, the lender has the right to take ownership through foreclosure and recoup the loan amount.

🥇 What Does First Position Mean?

A first position lien means that the lender holding this lien has first priority over all other claims on the property. If the borrower defaults and the property is sold (either voluntarily or through foreclosure), the first position lien holder gets paid first, before any other lenders or creditors.

This is crucial. In the event of liquidation, second or third lien holders may not get paid at all if the sale proceeds don’t cover the full debt.

Example:

Let’s say a property sells for $500,000 and there are two liens:
First position lien: $400,000
Second position lien: $150,000

The first position lender (you, through AJX Capital) would get paid in full, while the second position lender may only recover part—or none—of their $150,000.

🔐 Why AJX Capital Uses First Position Liens

At AJX Capital, capital preservation is a top priority. That’s why the majority of our investments are structured with first position liens on real estate assets. This ensures our investors are in the most secure position possible when providing capital for fix-and-flip or bridge loans.

Here’s what that means for you:

✅ Senior claim on collateral
✅ Higher chance of full recovery if the borrower defaults
✅ Peace of mind knowing your investment is backed by a real, tangible asset
💸 How Investors Benefit

By investing through AJX Capital, you’re not just earning attractive returns—you’re also benefiting from a secured structure with clearly defined legal protections. First position liens are one of the key reasons why our investors choose us for consistent, risk-mitigated opportunities.

🔍 Final Thoughts

If you're new to private lending or real estate fund investing, understanding lien priority is essential. And as part of our commitment to transparency, AJX Capital ensures that every investor knows where they stand.

Want to learn more about how our first position lien investments work in practice? Contact us and we will walk you through it.
By Mark Daguinod October 8, 2025
If you’re considering putting your hard-earned capital into a real estate investment fund, asking the right questions can make all the difference. Not all funds are created equal—and as an investor, you deserve transparency, performance, and peace of mind. At AJX Capital, we encourage all investors to do their homework. Here are 5 essential questions every savvy investor should ask before committing to a real estate fund—and how AJX Capital confidently checks every box. ✅ 1. Who Is Managing the Fund—and What’s Their Track Record? Why it matters: Real estate is not just about numbers—it’s about execution. A fund is only as strong as the people running it. Ask yourself: Does the team have real-world experience in real estate acquisition, lending, and development? Have they successfully navigated both strong and weak markets? Do they have skin in the game? How AJX Capital answers: Our leadership team has decades of experience across residential flips, commercial investments, private lending, and fund management. More importantly, we invest alongside our partners—because we only offer what we believe in. ✅ 2. How Is the Fund Structured and What Are the Terms? Why it matters: Transparency around how the fund operates—including fees, liquidity, and payout schedules—is critical. Ask yourself: Is the fund open-ended or closed-ended? Are there hidden fees that eat into returns? How often are distributions made? How AJX Capital answers: We offer a clear, investor-friendly structure with no hidden fees. Returns are paid on time, and you’ll receive regular reporting that outlines performance, upcoming projects or investment opportunities, and how your capital is working for you. ✅ 3. What Kind of Assets Will I Be Investing In? Why it matters: You want diversification—but also confidence that the asset class and markets are strategically selected for growth. Ask yourself: Does the fund invest in residential, commercial, or mixed-use properties? Are the markets growing or oversaturated? Is there a clear acquisition strategy? How AJX Capital answers: Our fund is diversified across residential and commercial properties in emerging and stable markets. We focus on value-add opportunities and below-market acquisitions, giving you both upside potential and downside protection. ✅ 4. How Are Risks Mitigated? Why it matters: All investments carry risk, but good operators have systems in place to protect capital and preserve returns. Ask yourself: Is there a clear risk management strategy? Does the team use conservative underwriting? Is there a buffer for market changes? How AJX Capital answers: Risk mitigation is built into every AJX deal. We negotiate aggressively, underwrite conservatively, and operate in-house—so we control every step from purchase to rehab to exit. Our focus is on long-term growth, not short-term hype. ✅ 5. How Will I Stay Informed About My Investment ? Why it matters: Passive shouldn’t mean out of the loop. Regular communication builds trust. Ask yourself: Will I receive consistent updates? Is reporting clear and professional? Can I speak to someone if I have questions? How AJX Capital answers: We believe in over-communication. You’ll receive regular performance reports, deal updates, and access to a dedicated investor relations team. We treat every investor like a long-term partner—not just a number.
By Mark Daguinod September 10, 2025
Property damage, vacancy stress, tenants skipping rent, late-night tenant calls. If you’ve experienced any of these, you already know that owning rental property isn’t always the dream it’s made out to be. While real estate remains one of the most powerful ways to grow wealth, the hands-on approach often brings more stress than returns. At AJX Capital, we believe there’s a better way. Real Estate Returns—Without the Hassle We offer a passive investment model designed for accredited investors who want to enjoy the benefits of real estate—without the headaches of being a landlord. Our Diversified Real Estate Fund allows you to earn consistent, attractive returns backed by real property, without any of the day-to-day burdens of ownership or management. Here’s How It Works: Your capital is pooled into our diversified fund. We lend that capital to carefully vetted real estate projects—primarily to AJX Homes, our in-house flipping and development team. You receive regular interest payments, secured by real estate assets. That’s it. No tenants. No maintenance calls. No market swings. Just steady, passive income. Why Investors Choose AJX Capital Our fund was designed with your financial goals—and your time—in mind. Here's what sets us apart: ✅ Consistent Returns We’re targeting projected annual returns of 10–12% , depending on the investment structure. ✅ Diversification Your investment is spread across multiple real estate projects , minimizing risk and volatility. ✅ Completely Passive No property management. No active involvement. Just reliable monthly interest payments. ✅ Asset-Backed Security All investments are secured by real estate collateral , providing an added layer of protection. Designed for Wealth Builders Like You Whether you’re looking to diversify your portfolio , preserve capital , or build a dependable passive income stream , our fund provides a proven alternative to traditional real estate investing—without the stress and unpredictability of being a landlord. Let’s Talk Curious if this opportunity is a good fit for your portfolio? Schedule a no-obligation call with our Investment Expert, Paul Dufour. He will walk you through the details, answer your questions, and help you understand how to make your money work for you—without lifting a hammer or chasing down rent checks.
By Mark Daguinod August 7, 2025
For many high-net-worth individuals, the idea of real estate investing is appealing—but the thought of dealing with tenants, property maintenance, and market fluctuations can be overwhelming. Fortunately, passive real estate investing provides a solution, allowing investors to reap the benefits of real estate without the headaches of hands-on management. What Is Passive Real Estate Investing? Passive real estate investing allows individuals to earn income from real estate without actively managing properties. Instead of personally handling leasing, repairs, or tenant issues, investors leverage professional management while still generating strong returns. Popular passive real estate investment strategies include: ✅ Real Estate Syndications – Investing in a large-scale real estate project managed by professionals. ✅ Private Real Estate Funds – Pooling capital with other investors to acquire high-performing real estate assets. ✅ Real Estate Crowdfunding – Investing small amounts in commercial or residential properties online. ✅ REITs (Real Estate Investment Trusts) – Buying shares in companies that own and manage real estate properties. Why Choose Passive Over Active Real Estate Investing? 1. Hands-Off Wealth Building Passive real estate investing allows investors to earn consistent, long-term returns without handling the operational aspects of property ownership. No tenant calls, no maintenance issues, no property management headaches. 2. Strong & Predictable Cash Flow Investing in private real estate funds or syndications provides steady rental income and potential appreciation, making it a reliable wealth-building strategy. Many funds offer quarterly distributions, ensuring a consistent passive income stream. 3. Diversification & Lower Risk Unlike direct property ownership, where one bad tenant or market downturn can hurt returns, passive investments spread risk across multiple properties and markets. At AJX Capital, our real estate fund invests in diversified, high-growth markets like San Diego, Tampa, and San Antonio, reducing exposure to volatility. 4. Tax Advantages Passive real estate investments benefit from tax-friendly strategies, including: ✔ Depreciation deductions (reducing taxable income) ✔ 1031 exchanges (deferring capital gains taxes) ✔ Lower long-term capital gains rates 5. More Time for What Matters By choosing passive investing, you free up your time to focus on your business, family, or personal goals while still growing your wealth. Investing with AJX Capital At AJX Capital, we specialize in diversified, high-yield real estate funds that allow investors to earn passive income with confidence. Our team handles property selection, acquisition, management, and returns—so you don’t have to. 🔹 Targeted Returns: Competitive annual returns with quarterly distributions. 🔹 Experienced Management: A team with decades of experience in real estate investing. 🔹 Exclusive Market Access: High-growth markets in San Diego, Tampa, and San Antonio and other key areas where we operate. 🔹 Hassle-Free Investing: No landlord responsibilities—just passive income. Ready to Build Wealth Without the Stress? 👉 Join the AJX Diversified Real Estate Fund Today!