Direct Capital Partners
Corporate Office: Minnesota - Satellite Office: Oregon - email: info @ direct capital partners .com
Hedge Fund Criteria for REO or Note Purchase

Hedge Fund Criteria for REO or Note Purchase

Our New York City Hedge Fund is just one of the funds we work with. We have other funds that are not currently listed so please contact us with your needs and we will match your portfolio with one of these funds.

Criteria

Fund A

Single Family Residence, 1-4 Units
The $200,000 Range, depending on the area, Bread and Butter Homes. Pools worth at least 1 million dollars.
Multi-Family, Apartments
Yes
Land, Condos or Town homes
No
Construction & Not Finished
No
Commercial
Yes - at least a minimum of $500,000, one building only is okay. (No Hotels right now) See below for what we are looking at.
You must be the Seller, No Broker, No Daisy Chains
Mandatory, No Exceptions
Funds Available

1st Fund: 50 Million that buys defaulted paper and REOs.

2nd Fund: 50mm Hard Money

3rd Fund: 100mm Commercial

Staffing: Former Goldman Sachs Employees

REOs
They will pay cash for the pool, but would like Terms if possible.
Notes - performing or non
Prefer terms (Seller Financing)
Investment Strategy

Their real estate strategy focuses on leveraging relationships with prominent developers and builders throughout the US to maintain a pipeline of potential investments. Taking advantage of these relationships with top single-family homebuilders, they combine top-down and bottom-up approaches to identify the most attractive opportunities. They seek to identify geographic regions experiencing economic expansion, as evinced by job creation and population growth, which offers a hospitable landscape for real estate investment.

In particular, they look for a pro-landlord legal environment, low tax rates, positive trends in state-specific litigiousness, and attractive per capita income growth. Within these areas, they then seek investment opportunities that are attractive based on fundamental investment characteristics. Their strategies are continually refined to ensure that their portfolio remains responsive to current market and industry conditions.

Risk Management

"A" does not make significant investments in higher risk investments such as blind pools, international investments, or raw land. They also avoid participating in highly structured transactions. While such investments may, at times, provide very attractive returns, they are not consistent with a research-driven core (as opposed to opportunistic) portfolio.

Although their organization is streamlined to minimize administrative costs that reduce overall returns, they have the deep research expertise necessary to evaluate investment opportunities. The portfolio that results from this expertise is a compelling investment alternative for core real estate investors seeking higher returns without assuming excessive incremental risk.

 

Criteria

Fund B

Single Family Residence, 1-4 Units
Must be SFR, no pool limit
Land, Condos or Town homes
No
Construction & Not Finished
No
You must be Seller, No Broker, No Daisy Chains
Mandatory, No Exceptions
REOs
They will pay cash for the pool, but would like Terms if possible.
Notes - performing or non
Cash
Location of REO's

AZ, NV, OR, WA, UT, CA, and TX

Location of Non-Performing Loans

TX, OK, LA, and AR

Location of Performing Loans
Nationwide (except AZ, CA, FL, GA, ME, MD, MI, NV, NY, and OH). Minimum current FICO score: 660

Any pool sent must meet at least 66% of the above criteria to be considered (please no, "throw enough mud at the wall and something's gotta stick" submissions; these will be quickly rejected).

 

We are currently working with several funds. Please provide us with what you have and we may be able to purchase it with one of our funds.

 

10 Points that Funders look at when underwriting commercial property:

 

  1. Current wholesale value of the property:  What’s it worth today, as is? What’s the 90 day quick sale price?
  2. Current rental cash flow produced by the property.
  3. Current detailed Rent Rolls:  A strong anchor tenant.
  4. Quality of the tenants: Time in business, history of payments, business attractiveness, etc.
  5. Trends in Rental Rates and Vacancies in the marke:.  Are they on the way up or down?
  6. Owner’s ability to service the debt from other sources:  What other sources of income do they have.  Do they have any other properties?  How are they going to make the payments on the bridge loans?
  7. Owner’s personal sources of liquidity?  Real Estate/Brick Rich is not liquidity.  They are assets but not liquidity.
  8. The tax assessed value of the property. 
  9. What is the environmental assessment?
  10. The general attractiveness of the property:  Cosmetics, condition, visibility, neighborhood.

 

© Copyright 2009- Direct Capital Partners, LLC. All rights Reserved.
Web Design by: FireStorm Communications
Keyword Tags: Performing and Non-Performing Product, bank brokers, bank reo properties, bulk reo, bulk reo sales, national reo brokers, national reo brokers association, nationwide reo brokers, reo agents, reo broker, reo brokers, reo brokers association, reo bulk packages, reo buyer, reo buyers, reo companies, reo new, reo sale, reo sales, reo seller, reo sellers, reos, non-performing residential mortgages, commercial reo,.