Focus West Capital is a licensed California real estate brokerage firm specializing in arranging private investor financing for all types of real estate throughout California.
Private money lending is a non-institutionalized, short term real estate opportunity that uses the protective equity of the property as collateral for the loan.
Trust Deed Investments can provide substantial returns with minimal risk. Investors have two options available for investing in trust deeds; purchasing an existing note or making a direct loan to the borrower for either refinance or purchase.
Focus West Capital specializes in providing loans that may not be available through traditional lenders. In other words we obtain financing for these loans from individual private investors.
Borrowers who fail to qualify for the guidelines of a conventional loan from a bank most often require private money financing. This form of financing can benefit the borrower in a variety of ways as well as provide a substantial return to the investors.
The types of loans that will be presented to investors for funding are residential rehab, residential investment, 1-4 family, office buildings, multi-use, retail centers, multi-family, residential care facilities, hotels and motels, gas stations, residential and commercial lots, residential and commercial developments, raw land, and churches.
Today, current interest rates on investments such as CDs, money market funds, treasury bills and bonds range in the low, single digits. Mutual funds and individual stocks are based on fluctuating markets. First Trust Deed investments are based on the appraised value of the real property and provide higher yields, fixed rates and less risk.
The investor will receive a yield from 7% to 14% for a term of 6 months to 3 years. Most loans are paid monthly with a fixed rate of interest only. Each loan will be carefully evaluated and underwritten by Focus West Capital and a determination will made as to the cost and term of the loan. Every loan will be held as a First Deed of Trust made out in the name of the Beneficiary(s).
The most important consideration with First Trust Deed investing is the amount of protective equity. Protective equity is the difference between the appraised value of the property and the loan amount. This is also known as loan-to-value (LTV) ratio. Focus West Capital arranges loans with an LTV never to exceed 60% of the property value. For example, if the property has an appraised value of $1 million, the maximum loan amount will be $600,000; therefore, the investor’s protective equity is $400,000.
This LTV ratio provides strong motivation for the borrower to fulfill his or her obligation to repay the loan. However, if the borrower is unable to perform on the loan and foreclosure becomes necessary, the investor is well protected. In case of foreclosure, investors may actually realize an increase in their overall investment yield.
Residential loans will have either a Broker Opinion of Value (BPO) or an Appraisal. Every commercial loan will have an MAI appraisal, which is the highest designation available for commercial appraisers. Appraisals are to be current, within 6 months, or a rewrite or new appraisal will be required.
All investor funding is handled through an escrow officer at an independent title company. The tile company is responsible for providing all necessary documents including title reports, escrow instructions and closing instructions. The company will also issue an ALTA Policy of Title Insurance, the most complete title policy available in California.
All related loan documents will be drawn by designated attorneys of Focus West Capital and forwarded to the investor for review and the title company for signature and approval by the Borrowers.
In addition, Focus West Capital will be responsible to investors for all factors mitigating risk, included but not limited to, all applicable insurance coverage, environmental reports and required permits.
Loan servicing is handled by an independent professional firm specializing in collecting payments from borrowers, disbursing payments to the investor, mailing required notices and statements, year end tax documents for IRS and the Franchise Tax Board, and coordinating foreclosure proceedings if necessary.
Upon review of the property and the completed loan package, an appraisal, or BPO will be ordered and an investment loan prospectus will prepared for the investor to review. If the investor requests additional information than all requested documents will be provided.