While important, we don't do just that because, in addition to focusing on the return, we genuinely believe in helping our borrowers and creating a win-win relationship.
Instead, we do the following:
We source deals from our extensive network of partners, and all deals are exclusive to us.
Our company follows a thorough underwriting process for each loan and borrower, ensuring their creditworthiness, ability to repay, and collateral security. This involves credit history checks, vendor references, site visits, appraisals, and more.
We only lend on projects that have real assets and property that can be collateralized.
Loan to value is typically 60-70% (or less) of appraised value, ensuring a wide margin of safety.
We only present opportunities where we will be a substantial investor.
Long term, win-win, integrity, and wide margin of safety are our foundational guidelines.
We love working with borrowers to find flexible and logical solutions to their financing needs.
We love it because we know what it is to be a borrower and meet a never-ending wall of resistance from traditional lenders who are more concerned about covering their you-know-what than working with legitimate borrowers. Borrowers who have a real financing need to unlock the next step of their business or project.
We know how frustrating it is to fight rigid rules that only consider the borrower's income. Instead we take a bottom-up approach to understand the collateral the borrower wants to pledge in return for financing.
As investors we also understand what it is to put capital at risk. After 20 years of general investing, with 17 years focused on real estate investing, asset management, and development, we have been through one tech bubble, one Great Financial Crisis, one global Pandemic, and several wild economic swings. Through those ups and downs, we have developed a robust, systems-oriented underwriting and due diligence process.
Our value-based approach focuses on risk control, long-term results, and sufficient returns to justify the investment risk.
We only share opportunities where we invest ourselves- we make sure we have skin in the game.
We offer loans often referred to as Special Situation lending (an atypical situation), which has either already materially impacted or has the potential to alter the future course of an opportunity.
In other words, these are typically opportunistic loans that are non-bankable but are backed with compelling reasons to provide a loan.
Please reach us at contact@novatofunding.com if you cannot find an answer to your question.
A deed of trust is a form of secured transaction commonly encountered in the world of real estate. In deed of trust transactions, investors serve as lenders. By originating real estate loans using their private funds, these parties may be able to realize lucrative returns.
Deed of trust investors may profit because they can demand higher interest yield than a financial institution would. A third-party trustee assumes control of the borrower’s interest in the property. If the borrower defaults, the trustee can remedy the situation on the lender’s behalf.
Would-be deed of trust investors must be accredited investors per the SEC rules and regulations. We suggest that you do not invest more than 10 percent of your total net worth in a single deed of trust. You may, however, invest greater fractions of your net worth in multiple deeds at your discretion.
Not all forms of real estate equity represent equally viable sources of lending security. We choose assets that maximize our clients’ chances of generating positive returns and minimize their risks.
We currently restrict our trust deed lending to non-owner-occupied homes in the state of Washington and California. Although this encompasses a range of individual properties, we concentrate the bulk of our activities on units with less than four habitations and single-family homes, including new construction, long-term hold and fix-and-flip residences. We reserve the right to change our strategies to accommodate market conditions and provide better services.
No investment is without risk, but deeds of trust features more security than most others. Working with Novato Funding gives you a trust deed for a real-world asset in Washington and California. You retain the power to take profitable actions like renting out or selling the property.
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