Pacific West Mortgage Fund Risks 

With any investment, there are risks; to thoroughly understand these risks, a potential investor in Pacific West Mortgage Fund must carefully read the Private Placement Memorandum and the Operating Agreement

The following is a summary of some of the risks:

• There is no public market for the shares and there are significant limitations on transfer and withdrawal. Investors should prepare to hold their shares as a long-term investment, with an investment horizon of 3-5 years. After 24 months, investors can withdraw funds on a limited basis with some restrictions. 
• Investment in the shares is speculative. The Investor assumes the risk of losing the entire investment.
• Lender bears the risk of defaults by borrowers. Pacific West takes care in assuring that each property has sufficient value to cover the risk of default. However, there is no assurance that the property can be obtained and then liquidated without some loss to the Investor. This risk is increased if the borrower files bankruptcy.
• Because of the nature of Pacific West's business, its profitability will depend to a large degree upon the future availability of secured loans. Pacific West will compete with institutional lenders and others engaged in the mortgage lending business.
• Possible limited supply of loans.
• The manager may use leverage to enhance the returns of the portfolio or to meet operational requirements. The use of leverage can have an adverse affect on profits, particularly in the case of interest rate fluctuations.

(See the Private Placement Memorandum and Operating Agreement for a detailed description of risks.)