The national real estate market continues to improve and the demand for housing is increasing. Stonecrest’s Capital Income & Growth Fund had a solid second quarter with the retail team selling seventy-seven properties and the loan team selling nineteen modified loans. The demand for performing modified loans is strong as investors look for consistently higher paying investments than what they can find with comparable fixed income investments.
We have had success in taking non-performing loans, turning them into performing loans, keeping them current for six months, and then selling them for a profit. One of the keys to our strategy is to make sure the non-performing borrower is vested in the modified loan by making them give us a “down payment” to complete the modification process. Many of these borrowers have gotten used to not making a mortgage payment so we need to help them readjust their thinking.
We are continuing to see a substantial flow of properties coming from Freddie Mac, and we are told that Wells Fargo and Fannie Mae are in talks with the vendors with which we work to sell some of their inventory. Governmental programs that keep the amount of housing inventory off the market have resulted in higher than expected (without government intervention) REO assets at these large institutions. For us though, it means there is the ability to purchase discounted REO’s for a longer period of time than initially anticipated.
Performance Statistics
Total Fund Annualized Return Since Inception: 24.02%
Featured Asset:
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Our featured property this quarter is located at 9095 Kochville Rd, Freeland, Michigan. It is a 3-bedroom, 2-bathroom, 1,064 sqft single family residence on .46 acres. Investment Stats (rounded):
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Fund Performance:
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