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OUR SERVICES
INVESTORS
We help investors improve communities while earning a solid, safe, return.
RECEIVERSHIPS
As fixed income investors search for yield, they need to take higher risks, either credit risk, interest rate risk, prepayment risk, or even volatility risk. We believe we have found an opportunity that gives an excellent return for very low risk.
When a court appoints a receiver to remediate a property that has been in disrepair, the receiver has the power to issue debt against the property, getting a “Super Priority” lien, putting the lien in first place, ahead of a first mortgage, second mortgage, equity holder, and local tax liens. The only lean that could take priority is an IRS tax lien.
The law that supports this is California Health and Safe y Code 179 80.7.
HOW DOES IT WORK?
A judge issues a “Receiver’s Certificate” to a “Court Appointed Receiver”, who needs to remediate subject property. This property could be commercial or residential, where the owner has abandoned the property, and has ignored repeated requests and demands for acceptable maintenance and upkeep. After repeated notices to comply, the Receiver is appointed to fixing the property (generally requiring construction or contracting work), and given authority to issue debt for financing costs, using the subject property as collateral. The Deed of Trust is issued to the lender, with “Super Priority”, over any lender(s) or equity holder(s).
By working with receivers, we find opportunities that present above risk returns, backed by real estate assets with significant equity protection. Being in a first lien position allows for the possibility of taking an equity hit at sale, since the equity holder and lender(s) would get “crammed down”, since the Super Lien holder(s) get paid first.