Fund Type: Private Mortgage Lending
Fund inception: 2004
Stonecrest created the Private Capital Fund to give individual investors the opportunity to participate in high-yield real estate-secured investments.
The fund consists of first and second trust deeds on residential and commercial properties, the majority of which are in California. The Private Capital Fund finances residential and commercial properties at a maximum loan-to-value ratio of 65%.
The Fund underwrites all loans with as much rigor as required to determine collateral value, insurance, credit and title history.
The fund’s objectives are to provide investors with robust monthly income and to enhance portfolio diversification.
Prior to the market’s downturn, the fund’s return averaged a stable 9%. Stonecrest anticipated market corrections and made the difficult decision to allocate a portion of those returns to loan loss reserves. That strategy, along with a diversified portfolio that performed well during the market downturn, allowed Stonecrest to absorb market losses against income rather than losing investors’ principal. Since that point, we have consistently returned over 7% to the Private Capital Fund.
The majority of the portfolio is secured by California real estate, with all loans subject to our proven underwriting guidelines:
- Ensure that there is sufficient equity in the underlying property
- Ensure that our borrowers are financially able to make their loan payments
- Identify our borrowers’ exit strategies in advance
- Perform thorough internal appraisal and review of property
- Secure stable yield for fund investors
- Cross-collateralize when possible for additional security
- Emphasize income producing properties that generate positive cash flow
- Avoid overexposure to a single borrower
- Remain sensitive to average loan amounts relative to the overall value of fund
- High yields.
- Intra-fund diversification to minimize overall portfolio risk.
- Safe positions in equity-strong properties.
- Choice between income or compounding distribution.
- Qualification for 401K, IRA, and pension plans.
- Professional full-service account management with independent annual account audits.
|Annualized Rate of Return|
|Gross loan portfolio dollars||$26,253,673|
|Loans in the portfolio||38|
|Average loan amount||$690,886|