When you think about a company having ‘investment experience,’ what image does that conjure up? Stodgy bankers wearing suits with mountains of paperwork? Or a streamlined company full of seasoned professionals ready to take care of your assets?
The team at American Mortgage Fund (AMF) is breaking the mold and putting it all back together in an entirely new fashion. With more than forty years of combined lending, finance and real estate acquisitions experience, the AMF team is quickly building their reputation as one of the best asset-backed funding groups in the business.
If you’re new to the area of personal investing, especially mortgage investing, you’ll want to work with someone who has the experience and expertise in structuring investments. David Crantz, principal member of the AMF team, states “the easiest way to get started is by putting money into a mortgage investment fund. Through that process, you can make connections with investment professionals who know how to find borrowers, choose profitable investments, and structure deals.”
Crantz adds, “real estate investments, either direct or derivative, have historically been among the safest forms of investing.” In addition to being safe, mortgage investing yields a substantially higher return than other fixed income instruments, such as bank deposits, CDs and bonds (to the tune of 11% vs. 1% - 3%). “In the long run, mortgage investing even outperforms the stock market,” he says. “This fact, coupled with the intrinsic safety of ‘brick and mortar’ assets make mortgage investing among the best options available in modern capital markets.”
Although many different types of investments relate to the same collateral, AMF deals with a diverse asset class. Returns may be higher with a direct investment, but so is the capital investment and investment horizon. Looking at factors like additional cash investments and tax rates can influence your investment decisions. So, you must ask the questions; Is it capital intensive? Are there capital gains to take advantage of when it comes to interest deduction? Are there lower taxes?
“Mortgage investments secures loans in real estate and generates returns from income - not from capital appreciation. Since mortgages usually mature in less than five years, the investment horizon is shorter and finite when compared to direct investment in real estate,” says Crantz. Single family homes, multifamily units, retail, office, and industrial are just some of the investments American Mortgage Fund structures.
Real estate borrowers often wish to take advantage of a purchase opportunity - a situation that requires cash liquidity or the ability to access immediate cash by utilizing the services of a private lender like AMF. Another scenario gives flexibility to borrowers that need it by allowing time to reorganize holdings and reestablish solid credit.
In some cases, borrowers do not fully meet the stringent credit and capacity requirements of an institutional lender, even though they may have sufficient collateral. For this situation, private loans can be a great win-win option for both parties. The borrower wins because he or she gets the loan they desire, and the private money lender, or investor, wins because they can create an opportunity to earn above-average returns.
“Our typical borrower is a self-employed individual with an immediate need for cash. They see an opportunity in hard money lending that allows for a quick close when banks are typically in a 3-4 month lead time.” With a maximum loan-to-value ratio of 55% on commercial and 65% on residential real estate, investors funds are conservatively structured to deliver an average portfolio yield, giving a typical 11% net on underlying property interests. All deals are sourced within the United States, using appraisal reports from nationally reputable third party companies.
HOW IT WORKS
American Mortgage Fund’s loans are asset-based with the real property as the basis for the lending decision. If a property is able to produce sufficient income, the note and the value of the property will fully secure the loan and provide adequate equity. In this program, the borrower’s credit is not an issue. Rather than focusing on the details of a borrower’s credit history, as institutional lenders would, the professionals at AMF concentrate their due diligence on the real estate collateral securing the loan.
“AMF only invests in mortgages secured by first deeds with a conservative loan-to-value ratio,” says Crantz. “For this reason, our investors have a substantial safety cushion in the event that the property value drops dramatically, thereby providing the best protection for the principal capital. Further, we diversify our investors’ capital across a broad range of geographic areas and assets.”
As private mortgage lenders, Crantz and his team provide the professional real estate investor and property owner with the ability to borrow on underwriting criteria not available through traditional institutional lenders. Among the other unique advantages of transacting with a company like AMF includes the speed of closing the transaction. American Mortgage Fund is able to close most loans within two weeks or less compared to the six week or longer timeframe required by an institutional lender.
The fund has a limited lifetime of three years, after which investments are liquidated and principal capital is returned to investors.
AMF’s collective industry experience instills confidence that they will be able to offer their investors consistent high yield returns and the highest level possible of investor services. “We’re passionate about giving you the returns you deserve after a lifetime of investing wisely,” adds Crantz.
If you’re looking for a wealth of experience in your investment strategy, American Mortgage Fund and trust deed investing is the perfect vehicle for you.
For more information, call (800) 359-1111 or visit www.earn11.com. American Mortgage Fund is located at 4 Hutton Centre Drive in Santa Ana.