Carolina Capital is a hard money lender serving the needs of the “Real Estate Investor” and the "Small Builder" borrower who is striving to build wealth and generate income for themselves and their families. We offer “hard money rehab loans” and "Ground up Construction Loans" for investors only in NC, SC, GA, VA and TN (some areas of FL, as well).
As part of our business practices, we also serve as consultants for investors guiding them to network with other investors and educating them in locating and structuring transactions. Rarely, if ever, will you find a hard money lender willing to invest in your success like Carolina Capital Management.
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Hello, thanks again for joining us for this episode. I'm
Bill Fairman and this is Wendy Sweet and and yes, this episode we're going to
discuss what to expect as an investor, but it's really more of a description of
our fund, how it operates what it is we invest in when everything happens. And
so, uh, yeah, let's just get started off. So we, this fund makes loans and
they're called hard money loans and bridge loans. So what is a bridge loan? A
bridge loan is a loan that is bridging the gap from here to here. In a
nutshell, if you're an investor and you're either buying a house to rehab,
buying a lot to put a house on, buying a small apartment complex that it is
distressed needs to be updated and they call it stabilize. So let's say it's
only 60% occupied for the area, 85% occupied is capacity being stabilized is making
sure that it's stabled stabilized or stable like a horse.
Bill Fairman and this is Wendy Sweet and and yes, this episode we're going to
discuss what to expect as an investor, but it's really more of a description of
our fund, how it operates what it is we invest in when everything happens. And
so, uh, yeah, let's just get started off. So we, this fund makes loans and
they're called hard money loans and bridge loans. So what is a bridge loan? A
bridge loan is a loan that is bridging the gap from here to here. In a
nutshell, if you're an investor and you're either buying a house to rehab,
buying a lot to put a house on, buying a small apartment complex that it is
distressed needs to be updated and they call it stabilize. So let's say it's
only 60% occupied for the area, 85% occupied is capacity being stabilized is making
sure that it's stabled stabilized or stable like a horse.
Yeah, 85% would be stable for the market. So you want to
bring it up to 85% occupancy. Right. And all of these are going to happen with
one or two exit strategies for the borrower, right? Right. So you're either
going to sell the house or refining or you're going to refinance it because
you're going to rent it out. Same thing with the [inaudible]. Any commercial
property, you're either gonna sell it at a profit because now it makes more
money and it's worth more, or you're going to refinance it with a traditional
bank because our payments are going to be way too high for you to make any
money if you're renting it. And we want our money back. Yes. So that's what we
invest in. We typically are only going to invest in our backyard or we're going
to make loans in our backyard. Right now, our backyard is the Southeast.
bring it up to 85% occupancy. Right. And all of these are going to happen with
one or two exit strategies for the borrower, right? Right. So you're either
going to sell the house or refining or you're going to refinance it because
you're going to rent it out. Same thing with the [inaudible]. Any commercial
property, you're either gonna sell it at a profit because now it makes more
money and it's worth more, or you're going to refinance it with a traditional
bank because our payments are going to be way too high for you to make any
money if you're renting it. And we want our money back. Yes. So that's what we
invest in. We typically are only going to invest in our backyard or we're going
to make loans in our backyard. Right now, our backyard is the Southeast.
We are located in rock Hill, South Carolina then is a
bedroom community of Charlotte, North Carolina. So about 75% of the loans that
we do are in the Charlotte market. But we do most, all the States that touch
North and South Carolina plus a couple more. So those are the geographic areas,
the types of properties that we do. We mentioned single-family, multi-family,
we do self storage. Heck, we even do mobile home park, but they're all going to
be income producing other than the fix and flip properties. So you have a
couple of exit strategies with those. We are really more defensive of a fun and
what we mean by that is that we're not chasing yield right or ideal borrower is
somebody that has been around a while. Our ideal property type is going to be
on the affordable housing side of things and you know, affordable housing in
different parts of the country are different everywhere.
bedroom community of Charlotte, North Carolina. So about 75% of the loans that
we do are in the Charlotte market. But we do most, all the States that touch
North and South Carolina plus a couple more. So those are the geographic areas,
the types of properties that we do. We mentioned single-family, multi-family,
we do self storage. Heck, we even do mobile home park, but they're all going to
be income producing other than the fix and flip properties. So you have a
couple of exit strategies with those. We are really more defensive of a fun and
what we mean by that is that we're not chasing yield right or ideal borrower is
somebody that has been around a while. Our ideal property type is going to be
on the affordable housing side of things and you know, affordable housing in
different parts of the country are different everywhere.
In our market it's under 300,000 if you're a single family
residence. We're looking for that piece of property that is going to be valued
by the largest number of possible buyers, if that makes sense. We want a big
target. So in the conventional loan space, the most valued property is the
single family residence in a subdivision with 2.5 kids playing in the front
yard and anything outside of that piece of pie and gets a little bit more
risky. If you get a $12,000 house, how many people want to buy a $12,000 house?
Well, most people would say, Oh yeah, I'll take that. Do you really want to
live there? Good place for probably not. And at the same time, not too many of
us can afford million dollar house either. So we want to be in that sweet spot
where we can sell to a first time home owner, someone that's downsizing, a real
estate investor or somebody renting, believe me, you can't rent a million
dollar house and get this same return on investment, then you can $150,000
right?
residence. We're looking for that piece of property that is going to be valued
by the largest number of possible buyers, if that makes sense. We want a big
target. So in the conventional loan space, the most valued property is the
single family residence in a subdivision with 2.5 kids playing in the front
yard and anything outside of that piece of pie and gets a little bit more
risky. If you get a $12,000 house, how many people want to buy a $12,000 house?
Well, most people would say, Oh yeah, I'll take that. Do you really want to
live there? Good place for probably not. And at the same time, not too many of
us can afford million dollar house either. So we want to be in that sweet spot
where we can sell to a first time home owner, someone that's downsizing, a real
estate investor or somebody renting, believe me, you can't rent a million
dollar house and get this same return on investment, then you can $150,000
right?
Right. So that's the space that we're trying to lend in
and we call it a defensive and being conservative because while we're not
trying to hit the big home runs, we're trying to stay in that market. That worst
thing happens like 2008 and we ended up owning all the properties. We can still
rent them out for what our expected return is going to be. So as our fund goes,
what happens in our fund? Well, number one, everything happens on the quarters.
That means you get paid on the quarters. We close out the quarters. You get
into the fund on the quarters. It doesn't mean we won't take your money before
that and we'll get into some detail later on that. But everything happens on
the quarters. You get your statements on the quarter. We pay out on the quarter
and then annually we have a meeting with all the members. We typically just do
a big zoom, a webinar, because you can't, we currently have what, 97 investors,
it's hard to get 97 people on the same zoom call.
and we call it a defensive and being conservative because while we're not
trying to hit the big home runs, we're trying to stay in that market. That worst
thing happens like 2008 and we ended up owning all the properties. We can still
rent them out for what our expected return is going to be. So as our fund goes,
what happens in our fund? Well, number one, everything happens on the quarters.
That means you get paid on the quarters. We close out the quarters. You get
into the fund on the quarters. It doesn't mean we won't take your money before
that and we'll get into some detail later on that. But everything happens on
the quarters. You get your statements on the quarter. We pay out on the quarter
and then annually we have a meeting with all the members. We typically just do
a big zoom, a webinar, because you can't, we currently have what, 97 investors,
it's hard to get 97 people on the same zoom call.
So we do what's called a zoom webinar where you can have
thousands of people on there, but they have to type in a little chat thing
instead of actually having their face on there. And then we, you know, we
contact our investors, quite often, Wendy and I'll do videos all the time, let,
let folks know what's going on with the industry. We want everybody to be
informed as much as possible. I think I mentioned this on another show that we
have three sets of eyes on our, on our books. The fund. You can invest with, an
IRA traditional, you can invest with a Roth IRA, you can invest in cash, you
can invest with a trust, you can invest in a solo 401k. Our minimum, the
investment is 50,000. But like I said before, most people put in a hundred.
thousands of people on there, but they have to type in a little chat thing
instead of actually having their face on there. And then we, you know, we
contact our investors, quite often, Wendy and I'll do videos all the time, let,
let folks know what's going on with the industry. We want everybody to be
informed as much as possible. I think I mentioned this on another show that we
have three sets of eyes on our, on our books. The fund. You can invest with, an
IRA traditional, you can invest with a Roth IRA, you can invest in cash, you
can invest with a trust, you can invest in a solo 401k. Our minimum, the
investment is 50,000. But like I said before, most people put in a hundred.
We want to make sure that, uh, you're, you're an
accredited investor, so we have an onboarding site that we'll put you through,
but we have to interview you first. If your kids, you have children that still
live at home under the age of 18 as an 18 yeah. Dependents under 18 you can
invest their money cause you have the power of attorney, but as soon as they turn
18 you got to get their money out. I have to give you back their money. Unless
you want to donate them enough money so they can be accredited. That's always
an option. I'm sure they would appreciate that. At the same time, we're not
going to hold property in that type of a fund. We only make loans in that. In
that type of fund. One of the biggest benefits of the fund is that you get the
opportunity to compound over time.
accredited investor, so we have an onboarding site that we'll put you through,
but we have to interview you first. If your kids, you have children that still
live at home under the age of 18 as an 18 yeah. Dependents under 18 you can
invest their money cause you have the power of attorney, but as soon as they turn
18 you got to get their money out. I have to give you back their money. Unless
you want to donate them enough money so they can be accredited. That's always
an option. I'm sure they would appreciate that. At the same time, we're not
going to hold property in that type of a fund. We only make loans in that. In
that type of fund. One of the biggest benefits of the fund is that you get the
opportunity to compound over time.
Was it Einstein or I think Einstein said it. Yeah. Well
anyway, I think you said it was the eighth wonder of the world compounded
returns. So let me give you an example and this is purely number example. If
you were making a 10% annual rate of return at the end of the year, you'd have
10% more than what he put in. If you compound over 10 years, that same 10%
annualized return, meaning you're taking that earning every quarter and you're
adding it to your balance at the end of 10 years, you'd be North of 16% return
and you've done nothing more than just allow the balance Tigger up to rollover.
And that is why it's the compounding is the eighth wonder of the world we, we
love compounded return. Now it's a little bit different on the, on the notes
side of things where you're going to receive payments monthly in the fund,
you're going to get your returns quarterly, whether you take payments or
whether you compounded it.
anyway, I think you said it was the eighth wonder of the world compounded
returns. So let me give you an example and this is purely number example. If
you were making a 10% annual rate of return at the end of the year, you'd have
10% more than what he put in. If you compound over 10 years, that same 10%
annualized return, meaning you're taking that earning every quarter and you're
adding it to your balance at the end of 10 years, you'd be North of 16% return
and you've done nothing more than just allow the balance Tigger up to rollover.
And that is why it's the compounding is the eighth wonder of the world we, we
love compounded return. Now it's a little bit different on the, on the notes
side of things where you're going to receive payments monthly in the fund,
you're going to get your returns quarterly, whether you take payments or
whether you compounded it.
If you're in a note, you're going to get payments, you
cannot compound it. And that's why we tell people if you're accredited, the
best place to put your money, is in a fund because what happens when I pay you
monthly payments? What do you do with that money? I put it in the bank until I
have enough money to make another investment and have to wait until that
happens. Right. So is that, are those monthly payments earning anything? No,
they're sitting there waiting to be used. And then the other, the benefit is once
your money is in the fund, it's always working, always working. When you're in
a loan, what happens when it pays off? It's sitting there waiting to be used
again. That's right. So if for example you're making an 11% interest rate on a
note and it takes you and that note pays off within a year and it takes you
another month to put it out to get it out there and another deal, your actual
annual as rate of return is like 9.49 percent.
cannot compound it. And that's why we tell people if you're accredited, the
best place to put your money, is in a fund because what happens when I pay you
monthly payments? What do you do with that money? I put it in the bank until I
have enough money to make another investment and have to wait until that
happens. Right. So is that, are those monthly payments earning anything? No,
they're sitting there waiting to be used. And then the other, the benefit is once
your money is in the fund, it's always working, always working. When you're in
a loan, what happens when it pays off? It's sitting there waiting to be used
again. That's right. So if for example you're making an 11% interest rate on a
note and it takes you and that note pays off within a year and it takes you
another month to put it out to get it out there and another deal, your actual
annual as rate of return is like 9.49 percent.
Right? And we took that one month to drop it from 11 to
9.49 that's pretty much it. Yet on the fund, I know there's, they would be a
lot of other questions. I want you to go to CarolinaHardMoney.com and click on
the tab that says investor and that'll tell you, give you a little bit more
information and there'll be a little questionnaire there. If you want more information
on the fund, we got tons of videos on it. There's a way to schedule a free
consultation with, with us to talk about the fund. We want you to read the PPM,
the term sheets. What are we doing on our next show, Wendy? Let's say our next
show, we're going to be talking about the differences between hard money and
bank loans. And that's a great topic because there's a lot of differences.
Yeah.
9.49 that's pretty much it. Yet on the fund, I know there's, they would be a
lot of other questions. I want you to go to CarolinaHardMoney.com and click on
the tab that says investor and that'll tell you, give you a little bit more
information and there'll be a little questionnaire there. If you want more information
on the fund, we got tons of videos on it. There's a way to schedule a free
consultation with, with us to talk about the fund. We want you to read the PPM,
the term sheets. What are we doing on our next show, Wendy? Let's say our next
show, we're going to be talking about the differences between hard money and
bank loans. And that's a great topic because there's a lot of differences.
Yeah.
And why you would need a hard money loan if you can
qualify for a bank loan. Right. All right, so next show we're going to discuss
more on the borrowing side and the advantages of hard money versus a bank. And
there's a place for both. Don't get me wrong. That's right. And we'll get into
that. So for now it was wonderful having you with us. Don't forget to
subscribe. Hit the like button please. Yes. Scott always tells us that, uh, we
get paid by the likes. I haven't seen monetary notice that had a like on it,
some of them dripping off of there now. And then again, our website,
CarolinaHardMoney.com if you're interested in investing, click on the investor
tab. Have a great day. So thank you so much for joining us. If you're really
like you heard, you want to see some more switch over here or here or perhaps
there. There's more episodes, but there's somewhere clicking on, by the way,
subscribe and like us as well. Please.
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Podcast:
http://thealternativeinvestor.libsyn.com/the-carolina-hard-money-fund-4
Visit:
https://redirect.viperseotools.com/r/iframe?key=Pkbn9kpWlAOJ
qualify for a bank loan. Right. All right, so next show we're going to discuss
more on the borrowing side and the advantages of hard money versus a bank. And
there's a place for both. Don't get me wrong. That's right. And we'll get into
that. So for now it was wonderful having you with us. Don't forget to
subscribe. Hit the like button please. Yes. Scott always tells us that, uh, we
get paid by the likes. I haven't seen monetary notice that had a like on it,
some of them dripping off of there now. And then again, our website,
CarolinaHardMoney.com if you're interested in investing, click on the investor
tab. Have a great day. So thank you so much for joining us. If you're really
like you heard, you want to see some more switch over here or here or perhaps
there. There's more episodes, but there's somewhere clicking on, by the way,
subscribe and like us as well. Please.
-----------------------------------------------------------
Podcast:
http://thealternativeinvestor.libsyn.com/the-carolina-hard-money-fund-4
Visit:
https://redirect.viperseotools.com/r/iframe?key=Pkbn9kpWlAOJ
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