The asset managers for Stonecrest’s Capital Income & Growth Fund are continuing to have success with their strategy of convincing borrowers to deed us their properties rather than go through foreclosure. Typically, borrowers are more than willing to follow this path because they prefer to avoid foreclosure. However, sometimes there are other liens against their property in positions junior to us. In these instances, we will contact the lien holder and try to get them to voluntarily reconvey their lien off of the property. Sometimes we have to negotiate a small payment as an incentive to the lien holder to reconvey, but often we can accomplish our goal without any payment to them. Either way, the process is to our advantage because it allows us to avoid the delays involved in getting property titles when foreclosure is involved.
Our asset managers have displayed some great negotiating skills this quarter and, as a result, we have been able to sell notes for a higher margin than usual. Many investors are now realizing that real estate prices are rising and they want to capture some of that upside. This makes them more accommodating at the negotiating table.
Stonecrest continues to work with the government programs that benefit the “hardest hit funds” and we are having good success. Like all government programs, the paperwork is extensive and the delays in getting payment are quite long. But we are patient because the checks we receive on behalf of the borrowers are worth the tedious paperwork and long waits.
2nd Quarter 2013 Total Fund Rate of Return: 10.42%
Total Fund Annualized Return Since Inception: 27.24%
|Performance Since Inception|
|Land Contracts Summary|
|Face Value of Notes||$177,987|
|Non-performing Notes Summary|
|Cost of Notes||$1,902,351|
|Modified Notes Summary|