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At Crescent Lenders, preservation of our clients capital is our top priority. Over the past 15 years of operations, we have never lost an investor's principal on any transaction.
Our track record is the result of our conservative underwriting standards and selective loan process.
Unlike capital pool models, we operate on a direct investment basis.
Therefore:
- You send your money directly to escrow or to the borrower
- We never touch your money
- Your money doesn’t sit idle
- When we identify a loan that meets our strict lending criteria, we share the details with you as to why we believe the loan is a strong candidate for funding, and you decide whether or not to fund it.
Using this structure allows us not to feel pressured into chasing bad deals, ultimately resulting in potential losses for our clients.
If you’re an Accredited Investor, High-Net-Worth Individual, Family Office, or Private Equity Group seeking high-yield California real estate exposure opportunities through hard money loans, contact us today to schedule a meeting.
California Hard Money Loans as an Investment
California hard money loans are widely regarded as the gold standard in the private lending industry.
California’s strong economy and historically stable real estate market make these investments relatively low-risk while offering investors attractive returns, without the headaches of maintenance, dealing with tenants, or being subject to real estate market fluctuations.
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High-Yield 1st Trust Deeds: 9-11% annualized returns
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2nd Trust Deeds: Riskier but come with higher returns, 12-14%
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Great For Diversification: Traditionally brings higher returns than bonds
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Investment Is Collateralized: All our California hard money loans are backed by California real estate
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Short Terms: Most of our loans have 12-month terms, but can be longer or shorter depending on circumstances
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Hassle-Free: We cover all aspects of the loan for you, including underwriting, creating the loan terms, and handling the loan repayment
Highlights of Why to Invest With Crescent Lenders
Strong Reputation
With over 15 years of experience in California hard money lending, we have a strong reputation for performance and reliability.
Consistent Deal Flow
As deals come up, investors will get emails showing our selection of high-quality loan opportunities, all of which have been vetted and underwritten using our conservative lending practices.
Proven Performance
Our flawless record has resulted in no investors having ever lost principal on any deal we have originated or managed.
Streamlined Investment
Our process is designed for efficiency and transparency, allowing investors to participate seamlessly while we handle all underwriting, documentation, and servicing.
FAQ
What kind of returns can I expect from investing in California hard money loans?
9% to 11% annualized for 1st trust deed loans and 12% to 14% annualized for 2nd trust deed loans.
Is investing in hard money loans safe?
Like any investment, there is risk associated with investing in hard money loans.
However, hard money loans are secured by real estate as collateral, helping to mitigate risk, but like all investments, there is no guarantee of repayment.
Primary risks include the borrower defaulting, resulting in foreclosure and potential loss of capital if property values have substantially declined at a rapid pace.
That said, we mitigate potential risks via:
- Rarely going above a maximum LTV ratio of 75%
- Performing due diligence on borrowers, collateral property, and projects before funding
- Strictly lending in California allows us to specialize in a state we know well, one that has some of the most sought-after real estate in the world.
What type of loans do you fund?
- 1st trust deed
- 2nd trust deed
- Bridge
- Hard money
- Business
- Cash-out refinance
- 1031 exchanges
- Probate
What type of borrower do you fund?
Ideal borrowers have strong equity of 65% to 70%, cash reserves, strong income, and own additional properties that can possibly be used to cross-collateralize the loan if needed.
Am I investing directly in loans or through a pooled fund?
You invest directly in specific loans; we help facilitate the transaction process between you and the borrower.
What fees does the operator or fund manager charge?
We typically charge an origination fee of roughly 2% of the loan amount. This fee is paid by the borrower, directly to us, the lender, and does not negatively impact investor returns.
Who services the loans and handles collections?
You are paid directly into your bank account each month, unless you instruct us otherwise.
Are the loans personally guaranteed?
Only under special circumstances do we require borrowers to personally guarantee hard money loans.
What happens if the borrower defaults & foreclosure is necessary?
Our hard money loans are secured by real estate, which means a tangible asset backs your investment. If a borrower fails to make payments and the loan goes into foreclosure, the property securing the loan is used to recover the investment.
Generally, you, as the investor, will hold a deed of trust in either 1st lien position or 2nd lien position.
1st lien position gets priority over other creditors, while 2nd lien positions get you…. once the 1st lien holder is fulfilled.
Foreclosure in California: Lenders can use a non-judicial foreclosure process, often faster than going to court. If the borrower doesn’t solve the default, the property can be sold at auction to repay the loan.
This process is as follows:
- Notice of Default: A formal notice is recorded and sent to the borrower, allowing them usually 90 days to bring the loan up to date.
- Notice of Trustee’s Sale: If the default is not cured, the property will be sold at auction to the highest bidder
- Trustee’s Sale: The property is sold at public auction. Proceeds go first to cover the loan balance, fees, and costs of foreclosure. Any surplus goes to the borrower.
If the property is sold for at least the amount owed, investors are repaid from the proceeds. If no third party buys the property, the lender (or investors) may take ownership of the property, which can later be resold to recover funds.
While foreclosure provides a legal path to recover investment capital, it can take several months and may involve additional costs. This is why most hard money loans are written with conservative loan-to-value ratios (LTVs), creating a protective equity cushion for investors.