The Company is offering equity positions in a mortgage fund focused on short term real estate loans, joint venture opportunities, and rental properties. The fund is projected to return 10-15% IRR, and to double member investments in 5-6 years.
The Pacific Capital Equity Fund was created by merging our mortgage and investment companies. With millions of dollars of loans being originated per year, we aim to transition the double digit returns being created for institutional lenders to private individual members of the Fund.
The fund has the opportunity to generate for its members $2-3 million a year in interest income or annualized returns of 9%-12% from loans. Similar to banks, loans are made to individuals for the purpose of purchasing real estate to rehab and resell. Because we are quicker and easier to work, borrowers pay a premium for that service. All loans have a protective equity position of 20% or more, meaning if we have to take the home back we have ample equity to cover accumulated interest, selling costs and recover all loan proceeds. This provides the fund a means of protecting its capital from loan defaults.
In addition to lending, the Fund also engages in joint venture projects with experienced real estate professionals. With these venture, we are able to obtain even higher returns while keeping our protected equity position at 20% min. Our current agreement with a Midwest developer is for 50 residential properties in the next 12 months and will result in a 40%-50% return for the fund.
To round out our investment strategy and diversify our investment mix, we are also accumulating a portfolio of rental properties with capitalization rates of return of over 20%. This allows for consistent cash flow, and appreciation opportunities.
Our overall goal is to provide members of the Fund with a safer, more profitable alternative to investing in the stock market. Backed by more than 15 years of investing experience, we are diligent about preserving capital, creating wealth, and mitigating risk.
Our approach and commitment to investing our personal finances alongside our investors keep us determined in protecting the Fund’s capital and delivering great returns.