Hard Money Questions

The vast majority of our borrowers are real estate professionals. Their typical business model is to purchase distressed properties at a deep discount using cash/hard money which banks will not lend on. They in turn rehab these properties quickly and turn their initial investment into substantial profits. In order to purchase distressed properties our borrowers need to move fast and be liquid. We afford this service to our borrowers by allowing our borrowers to avoid the time consuming bureaucracy and the hurdles that banks present on distressed properties. While fees and interest rates are considered high by normal banking standards they are just part of the cost of doing business for these real estate professionals who normally make strong returns on the these investments.

La Costa Loans can typically underwrite and fund a loan within 14 days of the site visit, but can react quicker if needed. The funding process typically takes 5-10 days.

Through our corporation and employees we participate in over 90% of the loans we underwrite. We believe this shows a strong commitment to our investors and borrowers as well as confidence in our own underwriting skills.

At the time a loan is originated, we charge loan origination fees that are paid by the borrower at closing from the gross loan amount. The monthly interest payments made by our borrowers go directly to our private money investors.

Unlike stocks and securities your investments are tangible. Investors own an undivided interest in a promissory note that is secured by a deed of trust or mortgage on real property that is underwritten at a maximum LTV of 65%. First Trust Deeds are recorded at the County Recorder’s office and offer legal protection, recourse and enforcement if defaulted upon. In addition all loans have title insurance and each property has hazard insurance. La Costa Loans employees visit every property we lend on and we control all rehabilitation funds to ensure that our assets are being repaired up to our expectations. Our normal loan is a one year term which allows us to constantly monitor the real estate markets and calibrate our valuations as markets change. Lastly, we require that our borrowers have a substantial amount of their own funds in each project.

We are a one stop shop for First Trust Deed investments. We originate, underwrite, fund, and service all of our loans internally. We take ownership in all aspects of the process and when there are issues we work through them to resolution. Today over 70% of the loans we write are with repeat borrowers and over 90% of our investors are repeat investors. Our investments are not fancy but they are reliable and offer predictable returns. We are pragmatic, cautious and plan on being in the business for the long run. By treating borrowers and investors as partners we are building a strong company that will serve everyone’s needs for a long time.