Investment Strategy
At Capital Alliance, we've developed an investment strategy that guides our loan underwriting policies and helps provide to investors highly competitive returns with low volatility.
Simply put, our strategy is to fund high-interest bearing instruments such as bridge and mezzanine real estate loans that are diversified by property type, loan configuration and physical location, and collateralized by assets with sufficient borrower equity in them to withstand potential losses due to foreclosures.
In support of this strategy, we have developed and refined a comprehensive underwriting policy to screen, evaluate and fund qualified opportunities which include the following capabilities and activities:
- Expertise in the specific real estate markets within which we do business
- Strong relationships with local mortgage brokers who know our borrower profile and provide us with funding opportunities
- A team of local appraisers who give us 48 hour turnaround on appraisal assignments and meet our demand for conservative estimates
- Hands-on processes to manage and service the loans which enables the quick identification and workout of problem loans
Our underwriting policy mandates a minimum loan-to-value ratio of 75% (meaning that 25% of the appraised value is borrower equity), and we routinely cross-collateralize with other assets in order to have recourse to these assets in the event of foreclosure.
This strategy supported by the effectiveness of our policies and procedures has enabled Capital Alliance to produce yields between 7% and 12.00% for our investors based on Net Capital Contributions since inception of the Calliance Realty Fund in 1996.
