Diversification within Private Money Lending

by Gregg Bernstein

As we approach the end of the 2nd quarter, with the summer approaching, Westridge is ready to continue the 2nd half of 2019 with more, quality real estate-secured debt transactions for the Fund. 

Westridge Lending Fund, LLC is a real estate-backed Mortgage/Trust Deed Fund specializing in business purpose loans (i.e., commercial and residential non-consumer loans). With a combined 75+ years of in‑house experience in real estate and lending, our ability to select and provide quality and consistent investments with healthy returns is our focus and passion. We are always looking for qualified and accredited investors interested in our quality, first-position loan investments. Our industry knowledge and prudent lending standards can offer diversification and opportunity to your portfolio at a time where private money lending is on the rise. 

Private money lending has developed into an industry that is no longer only focused on credit challenged borrowers with a valuable real estate asset. Times have changed. According to the Wall Street Journal, private money lenders now make up more than 50% of all mortgages being originated in the United States.

Why would a qualified borrower pay a higher rate for their mortgages? Often, these borrowers, need to either close quickly, with less red tape than a conventional bank, or the borrower’s transaction simply does not fit into the inflexible box that many conventional banks require.  Westridge has the ability to close quickly and be more flexible than banks. Savvy borrowers come to Westridge to obtain fast and flexible financing. Our Borrowers include all types of real estate investors; for example: fix & flippers, developers, entrepreneurs, and pioneers of the currently changing retail environment.

When you invest with Westridge Lending Fund, your money will be placed in the Fund’s existing portfolio of Mortgages as well as new Mortgages that are originated. Secured in first position by real estate with a Mortgage or Trust Deed, you will receive monthly distribution payments based on your investment in the Fund, and as loans are paid off, the Mortgage principal will be re-deployed into new 1st positions mortgages or trust deeds. There is a one year lock up period for your investment, but thereafter you can liquidate all or part of your investment within 90 days’ notice as long as liquidity in the Fund allows for it. Since 2015, no eligible request has been denied.

Westridge Lending Fund benefits from both geographic and real estate type diversity. Westridge has closed loan transactions in more than 30 states on all types of properties, including, single- and multi- family residences, retail, office, self-storage, skilled nursing, assisted living, mixed use, and more.  Westridge originates loans with a short term, typically 12-24 months, which decreases the possibility of large market fluctuations. As of the last publication to investors, the portfolio enjoys a conservative Loan-To-Value (LTV) at approximately 41%. These percentages can fluctuate as loans are paid off and new loans are added.  

In addition to maintaining diversification within the Fund, Westridge carefully evaluates all of the subject properties on which it lends. With every transaction, we obtain a written appraisal by a licensed, experienced and local appraiser. We research surrounding areas, conduct project feasibility studies, conduct appraisal reviews, and obtain back-up valuations and automated valuation models (AVMs) when needed. In addition, we also conduct mandatory site visits of each property where we sit down with the borrower in a face-to-face meeting, affording an important additional assessment of a proposed transaction.

In addition to a thorough evaluation of a subject property and its surroundings, Westridge has finely-tuned underwriting guidelines and meaningful risk mitigation measures for every loan transaction. From in-depth borrower background and credit checks, to geographically-based hazard insurance, to obtaining a
125% ALTA Title policy when available, to using outside and in-house attorneys on all transactions, our guidelines are designed to protect the parties to the transactions, as well as our Fund investors. We never lend beyond a 65% LTV, we originate 1st position loans exclusively, we implement conservative underwriting guidelines, and we proactively structure loans based on our guiding principles. Investors also have peace of mind knowing that the Fund is audited annually. In addition to being audited, Westridge uses a 3rd party administrator to control all transactions with the Fund’s investors. We cannot fund until the third party administrator signs off and is assured that the funds are going to the right place, documents are properly signed, a lender’s title insurance policy will be issued with the recorded mortgage or trust deed in first position.

You may be asking, “what sets Westridge apart from other Real Estate backed funds?” It is our dedication to our carefully developed, stringent guidelines even within a competitive marketplace, and our acute awareness of
current national and local real estate market trends, and how the development of technologies may impact real estate assets.  Additionally, our borrowers are vetted by our underwriting department, by completing a background check through a national vendor along with a deep internet search on the borrower and the asset on which we are lending.  Westridge prides itself on being able to proactively analyze a deal from all angles and creatively structure it, all while keeping within our strict guidelines. The world is constantly changing, and we will not originate a loan without knowing how to address these changes. Our success depends on our prudence, as well as our creativity.

From understanding a borrower’s human nature and financial patterns, to our knowledge of the national real estate markets where we lend, to understanding the importance of privacy and data security, our conservative
underwriting and cautionary approach is reflected in our audits.

There is no transaction out there, no matter how appealing, that is worth compromising Westridge’s principles of sound underwriting and compliance. It is who we are, what we are proud of, and why we have been working
to operate an exemplary Fund for our investors and borrowers. And, we will continue to evolve to ensure we are not getting complacent in a world that is changing by the minute.

To invest or for more information about Westridge Lending Fund, please contact Richard Katz at rkatz@westridgefund.com or Gregg Bernstein at gbernstein@westridgefund.com, or call us at (310) 220-4701. You can also visit our website www.westridgefund.com

Gregg Bernstein

310.220.4701

gbernstein@westridgefund.com 

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