Investment Type

Debt Fund

Target Return

9% - 15% Annually

Minimum Investment

$50,000

A Private Mortgage Investment Opportunity

EXECUTIVE SUMMARY

  • Exposure to single family & multi-family/mixed-use residential real estate via an un-leveraged private lending fund
  • Real estate investment without the risk of a personally guaranteed mortgage
  • Access to multiple geographies with unique market dynamics
  • Liquid portfolio of short-term loans, typically 6 to 24 months in duration
  • Consistent returns, with low volatility, targeted at 9-10+% annually, monthly interest distributions
  • Portfolio of first position mortgages personally guaranteed by sophisticated borrowers
  • Diversification across a portfolio of loans in 25+ states
  • Liquid real estate investment, no lock-up and 45 day notice

STRATEGY & OVERVIEW

We mitigate risk through adjustments to the loan terms applied to an individual borrower or deal. We can also adjust exposure to an individual loan or borrower through selling notes to our institutional capital partners.


Loan Terms:

  • Interest Rate + Method: 7.0 to 12% Interest Only on Full Loan or Funded Loan Balance
  • Length: 6-24 months, typically 13 months
  • Loan-to-Cost: 65% to 90%, may reduce leverage to mitigate borrower/deal risk
  • Loan-to-After-Repair-Value: up to max 75%, may reduce to mitigate borrower/deal risk
  • Construction Contingency: 10% required on 1st loan with Aloha and suggested on all loans.
  • Construction Reserve: we escrow 100% to ensure completion of project, interest can be charged on unfunded reserve
  • Construction Draw: disbursed upon inspection for completed work
  • Interest Escrow: may be collected at close to mitigate risk

Lender Protections:

  • Collateral: property, personal guarantee and assignment of rents along with cross-collateralization of all loans with each borrower
  • Title: clear title with title insurance equal to loan amount & closing protection letter from closing agency
  • Documents: recorded 1st mortgage, promissory note, persona guarantee, non-owner occupied b2b attestation, draw agreement
  • Insurance: We require builder’s risk & flood insurance, with Aloha as additional insured
  • Legal Experience: Our legal counsel is used by the top institutional note buyers
  • Note Sales: Our institutional capital partners acquire notes from us within 10 business days allowing us to remove or limit risk to an individual loan or borrower.

We partner with sophisticated borrowers with a proven track record and underwrite each deal for success.

Borrower:

  • Verify the borrower(s) PAST EXPERIENCE:
    • Review prior transactions: purchase & sale settlement statements and before/after pictures
    • On-site due diligence
    • Interview their vendors: GC/Contractors, Agent/Broker, etc.
  • Underwrite the guarantor(s) CREDIT WORTHINESS & BACKGROUND:
    • Personal Financial Statement
    • Tri-merge credit report
    • Two months of bank/brokerage statements & W-2s
    • Personal business tax returns
    • Background check to verify employment, civil & criminal history and consumer behavior

Deal:

  • Determine the CURRENT, RENOVATED or STABILIZED VALUE:
    • Review a detailed scope of work & timeline
    • Appraisal of As-Is and As-Renovated values by a licensed vendor
  • Underwrite the project’s FEASIBILITY:
    • Determine if the borrower(s) past experience aligns with the size and complexity of the project
    • Large projects (expanding footprint or sqft >25% or construction budgets >75% of current value) may require 3rd party construction feasibility study
  • Underwrite the project’s EXIT PLAN:
    • Flip: ARV is less than 200% of median home price in the zip code
    • Flip: Avg. DOM should be less than 100 days in the zip code
    • Refinance: Borrower meets our Rental Loan Program underwriting guidelines
    • Profit Margin is greater than 10% of Project Cost

ALOHA CAPITAL LENDING STATS

Loan Origination Amounts by State (from 2015 to 2019)

  • Louisiana (1): $94,500
  • Wyoming (1): $104,000
  • Washington (1): $161,250
  • Nebraska (1): 254,400
  • Oregon (1): $264,625
  • Michigan (2): $313,600
  • Wisconsin (4): $314,600
  • Georgia (2): $336,780
  • Connecticut (3): $355,550
  • Florida (3): $452,800
  • New York (5): $468,850
  • Kentucky (2): $609,000
  • Oklahoma (7): $614,128
  • Virginia (3): $620,400
  • North Carolina (3): $620,825
  • Hawaii (2): $754,250
  • Pennsylvania (5): $795,367
  • Texas (5): $894,375
  • South Carolina (1): $975,000
  • Washington DC (4): $1,329,278
  • California (2): $2,456,150
  • New Mexico (15): $2,544,271
  • Minnesota (20): $3,226,660
  • Kansas (18): $3,619,299
  • Maryland (31): $6,135,849
  • Indiana (150): $12,426,158
  • Illinois (53): $22,444,888
  • Ohio (203): $22,477,119
  • Missouri (277): $22,842,369
  • Colorado (179): $83,748,521

GRAND TOTAL (1,004): $192,254,863


ALOHA CAPITAL NON – PERFORMING LOAN SUMMARY

Defaulted Loan Stats:

  • Of almost 900 loans originated, 55 loans have gone into non-performing status since Aloha Fund’s inception
  • 13 of 55 non-performing loans have been cured to-date, resulting in a principal gain earning the Fund a total return of 2.48%
  • There are currently 4 loans with a single borrower totaling $493K in active foreclosure proceedings

Resolution Protocols:

  • Experienced counsel with foreclosure experience are engaged if non-performing loans aren’t cured quickly
  • Keep an open line of communication; work with borrower to try to cure through assisting with execution of the project
  • Deed in Lieu of Foreclosure if an exit at par or above is projected
  • Foreclose and sue on the Personal Guaranty

FUND SUMMARY

Investment Manager: Boulder LTD Management, LLC
Origination/Servicing: Aloha Capital, LLC
Legal Counsel: Rimon Law, PC (Securities); Larocca Hornik Rosen & Greenberg (Lending)
Fund Administrator: Fleming Fund Services, PC
Audit and Tax: Stout, Causey & Horning, CPAs
Subscription/Distributions: Monthly
Redemption Frequency: No lockup; 45 days notice, Monthly
Minimum Investment: $100,000
Loan Servicing Fee: 10% of interest earned and received
Management Fee: 0.5% annually, charged monthly
Account Types: Non-qualified, IRAs, ERISA, Foundation/501(C)3, etc.


OUR TEAM

Steve Sapourn, Founder & Principal
Steve is a co-founder and portfolio manager of Aloha Capital. Steve oversees borrower & deal underwriting and portfolio management and is focused on maximizing returns and mitigating risk. As a real estate investor for over 20 years, Mr. Sapourn, actively owns commercial and single family residential properties and was a private lender before establishing Aloha Capital. Steve’s years of experience in the alternative investment space, include serving as the portfolio manager for a $130 million quantitative trading strategy fund.

Christopher Jones, Founder & Principal
Chris oversees all business development, investor relations and capital partnerships. In his two decades of experience in the alternative investment industry, Chris has raised over $200 million in assets. He has served as Chief Compliance Officer, as well as having worked in operations and trading. Over the 20+ years managing investment funds, including Sapourn Financial Services, Dekker Capital Management, and Diamond Peak Capital; he is proud to have delivered friends & family, family offices and institutional investors solid absolute returns throughout several market cycles.

Kevin Hill, Chief Operating Officer
Kevin oversees operations, compliance, underwriting, marketing and sales efforts. Mr. Hill has over 15 years of experience in the alternative investment space, including managing trade operations at AlphaMetrix, a managed account platform with $3 billion AUA. He has been deeply involved with growing several financial services and technology businesses where he focused on the development of technology, processes, people and partnerships to drive both revenue growth and profitability.

 

Aloha Fund’s investors receive income distributions monthly, or can choose capital account balance growth, or a combination of both.

Fund returns are calculated net of fees and expenses and represent the average return of the fund. individual member’s net returns vary based on the timing of their capital transactions. The performance reflected above represents the monthly net income divided by the beginning of month total capital, adjusted for capital activity at the beginning of the month. The total, annual and inception-to-date returns are calculated assuming compounding monthly returns on invested capital, and not those of investors taking monthly income distributions. Past performance is not a guarantee of future results.

Aloha Capital LLC

720-340-7107

Office Locations

Aloha Capital LLC
2525 Arapahoe Avenue, E4-259, Boulder, Colorado, 80304
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