To provide investors with high-income opportunities through special situation loans secured by real estate. By using our knowledge, experience and personal service, we guide clients though each investment that provides attractive income opportunities secured by a deed of trust.
Trust deeds offer:
Above average yields, typically between 8.0% and 12.0%.
Steady monthly or quarterly income.
Security of loans backed by a recorded deed of trust and a maximum 65% load to value.
Diversification from traditional fixed income investments.
Returns uncorrelated to the stock and bond market.
Value Investment Philosophy
We apply our strict value investment philosophy to real estate backed lending. As developed by Benjamin Graham an popularized by Warren Buffet, the central tenet of value investing is entering into each investment with a “margin of safety” in order to minimize the chance of permanent loss of principal.
A margin of safety is created by being conservative in our appraisal of the real estate that backs our loans. More importantly, we restrict the amount we lend to no more than 65% of the value of the underlying collateral (the amount we lend is often significantly less than 65%). Should anything go awry, the protective equity of the value of the property above the amount of the loan ideally ensures the loan’s principal will be preserved.
When it is deemed necessary, additional security such as a personal guarantee or an interest rate reserve may also be required of the borrower. By rigorously adhering to our conservative underwriting standards, we can protect our investors even in unusually adverse real estate markets.
Our Investment Criteria
Portfolios managed on a loan-by-loan basis or as a portfolio of loans.
Loans total no more than 65% of the appraised value of the real estate collateral at the time of the loan (often less).
Loans are generally in1st position but may be in 2nd