Our newest venture is Starfury Capital Management for private trust deed investing. Through our private syndication channels, we gather together private financiers (accredited or sophisticated) for specific projects to fund on commercial and residential income properties with hypothecated 1st lien trust deeds (secured by real property).
This is very similar to hard money lending, but with a slight twist to amplify yields and reduce risk through low Loan to Value (LTV) ratios and high Cash Flow Margins (CFM). As a lender, rather than an equity participant, our private financiers get paid first, rather than last.
Our private financiers lend funds to us through a promissory note. We immediately lend the funds (on a qualified project) to the borrower as a promissory note and deed of trust (security instrument). Our private financiers receive a Hypothecation Agreement as a security instrument for our promissory note to them.
By applying Time Value of Money (TVM) principles, we can leverage multiple segment (participation) loan structures for higher yields than institutional lending. We qualify the property (asset), then the management team, and finally the borrower with Asset Based Lending (ABL) guidelines. The asset is the primary qualifier.
We also buy 1st position secured notes for commercial and residential income properties, either performing or non-performing, at strong discounts. For notes secured by distressed properties, our relationship with Smith Syndication supports taking over distressed properties, renovating and repositioning, then refinancing with institutional long-term fixed rate debt.
Go to our Wealth Creation page for more details.