|
Pacific West Mortgage Fund,
LLC, originates and invests in high yield mortgage loans secured
by real estate throughout the United States, primarily in California.
These mortgages are held in a pool that earns interest paid by
the borrowers. They usually have terms of one to four years, and
generate interest income and yields of between 9% and 15% per year.
Certain accredited investors may purchase shares in the fund and
participate in the profit generated from these high yield mortgages.
The interest from the mortgages make up the monthly distributions
and returns to the Investors.
Despite their high yields, the
mortgages to be originated and/or purchased by the partnership
are secured by real estate at a modest loan-to-value ratio.
This is because the primary basis for making each loan is the underlying
value of the property securing the loan — and each mortgage
loan in the pool will be secured by property that is valued much
higher than the loan amount itself. Whether commercial, industrial
or residential, typically the loan-to-value (LTV) is 50%-60%, but
in no case over 70% of the property value. This excess equity in
the property provides a high level of protection for the investor.
If it is ever necessary for the fund to take control of the property
from a borrower, there should be a significant equity cushion to
cover the principal, interest and related foreclosure costs.
Loans made or arranged pursuant to a California Finance
Lender's license. |
|