The Capital Income & Growth Fund will be winding down in 2017, with distributions of shareholder capital coming at each quarter end starting in Q1 and ending in Q4. Stonecrest was considering opening a new distressed asset fund but hesitated because of concerns regarding the availability of inventory in the coming years. Then we discovered the Claims Without Conveyance of Title (CWCOT) program used by many banks and servicers to dispose of HUD assets. As a result, we have decided to move forward in opening our new fund and, for the first time, we’ll be using leverage.
The CWCOT program was designed to use quick sales to decrease the number of FHA default properties. Originally developed to help servicers sell properties quickly at auction without having to convey them back to the HUD, CWCOT received a crucial update in 2014 when HUD recognized that, in order to be competitive, these properties needed to be discounted.
At that point, a great opportunity opened up for investors because HUD’s mandatory discounts allowed bids below the total debt owed on the asset. The amount of these discounts varies by state, but can be anywhere from 10% to 35% off the value of the property and servicers can choose to discount them even more if they wish.
The real estate market and overall economy have strengthened substantially and to achieve higher returns, we believe an amount of leverage is appropriate at this time. The new fund will have the ability to borrow up to fifty percent of the purchase price of the assets and we anticipate an annualized return to our investors in the range of 12%-15%.
If you would like to get more information about the new fund please contact your account executive.
Total Fund Annualized Return Since Inception: 18.23%
|Performance Since Inception|
|Land Contracts Summary|
|Face Value of Notes||$1,016,078|
|Non-performing Notes Summary|
|Modified Notes Summary|