Single Family business purpose lending
Since 2007 Coastal Capital has provided short-term loans secured by real estate to developers & real estate investors who purchase, rent, renovate, and resell single family homes, multifamily buildings, light-commercial properties and land. There are numerous reasons why borrowers may need liquidity (such as paying off other debt, improving a property to raise rents, difficulty for the self-employed to qualify, traditional bank timeline is to funding is to lengthy, etc.) and are willing to pay above-market rates. These loans provide investors with a consistent stream of income from interest payments while allowing borrowers to access working capital for their projects.
Welcome to Modern Real Estate Investing
Investors Benefits
Management of fund
Management Fee
Note Purchases
Investors participate as a limited partner in Coastal Capital Funds. Investors receive income generated from mortgage interest which can be distributed monthly or reinvested each month. Each partner in the fund receive the followings:
- Current monthly interest income which may be re invested
- Monthly portfolio information, current and non current loans with values
- All financial information regarding fund
- Monthly Statments
- Year end recap along with a K1
- Selection of loans for fund
- Appraisal reviews
- Underwriting process
- Recording Deeds of Trusts
- Servicing of each Deed of Trust / Borrowers payments
- Past due accounts
- Foreclosure sales / marketing
- Management of properties / rentals
- Legal Fee’s
- Tax preparation
- Management fees of up to 1.5% on an annual basis.
- For other fees and disclosures please review the offering documents.
- Quick Closings
- No Out of Pocket Expenses to Note Seller
- Competitive Top Dollar Pricing
- Strong Financial Backing
- Flexible Note Buying Programs
- Customized Purchase Option in Writing
- Fair Business Dealings
Allocation
Allocation
Building a sound portfolio starts with thoughtful allocation among major asset classes. With Coastal Capital, you can allocate a meaningful portion of your portfolio toward commercial real estate to complement your public market investments.
Diversification
Diversification
The hallmark of sound investing is diversification, our low loan amounts allow you to diversify the real estate portion of your portfolio by investing across a range of borrowers, helping you manage risk while retaining substantial upside potential.
How It Works
Investment Opportunity
A borrower finds a property that he/she believes can be renovated and resold for a profit or already owns and needs liquidity.
Secured Funding
Coastal Capital lends up to 65% of the purchase price to buy the property at a 9% - 13% interest rate. Coastal Capital’s loans are secured by the property in the first or second position.
Minimizing Risk
The entire loan is not released but maybe partially funded as improvements to the property are made to reduce Coastal Capital’s risk and improve the funds return.
Properties Renovation
The borrower renovates the property, which improves the value, further protecting the loan.
Property Sold - Loan Repaid
Usually in 6-12 months, the borrower sells the property for a profit and repays the loan.
Loan Safety Net
If the borrower defaults, Coastal Capital forecloses on the property. The 35%-40% difference between the value of the property and the loan amount provides a margin of safety for Coastal Capital to recoup its principal and any lost interest and often additional profit at a foreclosure sale.
Understanding our Statement and Calculating Share Value in the Fund
Rationale for Investment Strategy
Invest in pre-vetted projects from experienced real estate companies
High Current Income
Professional single-family residence (SFR) renovators have special requirements, such as short funding timelines, that traditional institutional lenders are unwilling to accommodate. This provides an opportunity for private lenders who cater to this market to command premiums on their capital. Most private lenders (also referred to as hard money) specialize in certain states or counties and residential versus commercial.
Comfortable Margin of Safety
Loans are secured by a first or second lien on a house. Borrowers typically provide 20%-50% of the capital needed to buy the house, renovate it creating the need for a short-liquidity solution. Additionally, professional developers often create equity at the time of purchase by buying houses at prices below retail value. They further enhance the value of the collateral through renovations that they fund with their own equity.
Conservative Approach to Underwriting
The Fund performs a consistent and detailed underwriting process on each investment that it makes. The first fund started in 2007. This underwriting combines a deep knowledge of local real estate markets to establish collateral value along with strong relationships with borrowers and an understanding of their strategy and capabilities. As a result of this approach, no losses have been incurred on any of the Fund’s investments since inception.
Established Relationships to Source High Quality Investments
The Principals have been investing actively via the fund in California since 2007 and have strong relationships with borrowers, brokers, and other lenders, resulting in a steady supply of loans that meet the Fund’s investment criteria.
Fund Diversification Reduces Default Risk
Investing in a well-diversified portfolio of loans across multiple borrowers protects principal in the event of default, instead of owning one or two individual trust deeds.
Open the Door to Modern Real Estate Investment
*By choosing yes, I agree that I want to receive news, updates, and event notifications from and about Coastal Capital. I consent to Coastal Capital processing my personal data for these purposes and as described in the Privacy Policy. I understand I can withdraw my consent at any time.
Coastal Capital’s funds are only open to accredited investors as the term is defined by the Securities Act of 1933 under Rule 501 of Regulation D. Generally speaking an accredited investor is an individual who individually, or jointly with a spouse, has a net worth that exceeds $1 million, excluding the value of the primary residence. A person may also qualify as an accredited investor with an income exceeding $200,000, or $300,000 jointly with a spouse, for each of the two most recent years and a reasonable expectation of the same level of income in the current year.