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We have robust quality controls with detailed checklists and a review of third-party reports.
Catalina Estates LLC
Catalina Estates, LLC is a real estate investment firm formed in 2011 and based in Los Angeles, California. The two owners of Catalina Estates, Christopher Lim and David Lu, also own an affiliated brokerage company together, Neighborhood Consulting, Inc.
Since 2011 Catalina Estates has focused on identifying properties that could be purchased for a significant discount to market price, rehabbing those properties by performing primarily cosmetic repairs and reselling those properties for significant profits once the repair work was completed.
Catalina Estates has successfully "flipped" several properties with others pending. Their completed projects include:
Property | Purchase Price | Market Price | Repair Cost | Sale Price | ROI |
16121 S Harris St. Compton, CA 90221 | $115,000 | $160,000 | $25,000 | $242,000 | 89% |
9166 Gregory St. Cypress, CA 90630 | $384,200 | $550,000 | $80,000 | $680,000 | 56% |
640 Boxwood Ct. Ontario, CA 91761 | $402,000 | $625,000 | $50,000 | $725,000 | 68% |
8489 Hunter Dr. Rancho Cucamonga, CA 91701 | $315,000 | $480,000 | $40,000 | $500,000 | 46% |
6231 Friend Ave. Whittier, CA 90601 | $370,000 | $625,000 | $60,000 | Pending | N/A |
At A Glance
Property Type: | Residential, Single-Family |
Investment Type: | Loan Purchase* |
Estimated Return: | 9% annualized |
Loan Term: | 12 months |
Location: | Lodi, CA |
Purchase Price: | $120,000 |
Loan Amount: | $115,000 |
Current As-Is Appraised Value: | $180,000 |
Current Loan to Value: | 63.9% |
Summary
The borrower, Catalina Estates LLC, is obtaining a loan for the purpose of a rehab. Catalina Estates LLC is performing renovations on the property and will look to sell as quickly as possible at a higher price than the purchase price. Renovations typically include new paint, new carpet, system, plumbing and electrical upgrades, and general clean up items. Upon completion, the property will look like other renovations Catalina Estates LLC has executed.
Investors will receive interest payments of 9% with a final balloon payment at the end of the loan term. The security interest for the underlying borrower loan is a mortgage deed secured by the property in first position.*
Risk Factors**
- Forward-Looking Statements: Investors should not rely on any forward-looking statements made regarding this opportunity, because such statements are inherently uncertain and involve risks. We use words such as “anticipated,” “projected”, “forecasted”, “estimated”, “prospective”, “believes,” “expects,” ”plans” “future” “intends,”, “should,” “can”, “could”, “might”,“potential,” “continue,” “may,” “will,” and similar expressions to identify these forward-looking statements.
- Market Risk: Investments related to mortgages secured by real estate are subject to market valuation risks that may be caused by changing economic and local market conditions. The property underlying the corresponding borrower loan is expected to have reasonably acceptable loan-to-value ratios and to meet certain other valuation criteria, but estimated values made when the loan is originated may not fully represent current market values, and subsequent market values will in particular be affected by changing economic or local market conditions. Such conditions are beyond the control of Realty Mogul and of the corresponding borrower on this loan. Such conditions may change due to factors such as local real estate market conditions, prevailing interest rates, the rate of unemployment, the level of consumer confidence, the value of the U.S. dollar, energy prices, changes in consumer spending, the number of personal bankruptcies, disruptions in the credit markets and other factors.
- Credit Risk: The borrower loan is being made with respect to a property that is in need of repairs, a situation that does not generally meet the financing criteria for conventional mortgages from institutional sources. Credit risk is inherent in the mortgage lending industry, and there can be no assurance that the credit worthiness of the borrower will be sufficient to assure the full repayment of the underlying borrower loan.
- Insurance Risk: The borrower will maintain insurance of the kind that is customarily obtained for similar properties, but is not expected to carry certain disaster-type insurance (covering events of a catastrophic nature, such as earthquakes). In the event that an uninsured disaster should occur to the real property underlying the corresponding borrower loan, or in the event a borrower does not maintain the required insurance and a loss occurs, Realty Mogul could experience difficulty recovering the principal amount of the corresponding borrower loan and any interest due thereon.
- Illiquid Investment - Transfer Restrictions & No Public Market: The transferability of these securities are restricted by the terms of this offering and by U.S. federal and state securities laws. In general, investors will not be able to sell or transfer their interests. There is also no public market for the securities and none is expected to be available in the future. Persons should not invest if they require any of their investment to be liquid. This is particularly important for persons of retirement age, who should plan carefully to assure that their assets last throughout retirement.
Risk Mitigation**
- There is a personal guarantee on the underlying borrower loan.*
- The borrower is a real estate company with a history and a track record of success.
- The security interest for the underlying borrower loan is a mortgage deed.*
- The underlying borrower loan is protected by title insurance.*
- The underlying property is protected by hazard insurance.*
- Investor returns are not contingent on the appreciation of the property value and investor returns do not increase based on any resale price. The borrower is still obligated to repay the corresponding borrower loan.
- In a worst case scenario, a foreclosure of the property is possible. Proceeds would be distributed to investors according to the percentage of the total investment opportunity initially funded net of any expenses incurred for the foreclosure proceedings.
*An investment in this loan will be made through a borrower dependent payment note issued by Realty Mogul. This promissory note is dependent on payments that Realty Mogul receives on the underlying borrower loan. While the underlying borrower loan is secured by legal title on real estate, the borrower dependent payment note is not itself secured nor does it have a personal guarantee.
**The above is not intended to be a full discussion of all the risks of this investment. Please see the Risk Factors in the Investor Document Package for a discussion of additional risks.
The City of Lodi is located in San Joaquin County, which is in Northern California approximately 35 miles south of Sacramento, CA and 80 miles west of San Francisco, CA.
Lodi is best known for being the "Heart of California's Premium Wine Business" as the production of premium quality wines is the primary economic driver in the region. Supported by over 90,000 acres of vineyards that surround the Lodi community, Lodi-Woodbridge winegrape growers annually produce a crop worth more than $350 million. Nearly 40% of California’s premium wine grapes are grown in this region, making Lodi the “Winegrape Capital of the World”.
The Lodi-Woodbridge area has been part of California’s wine industry for over 100 years. Over 60 wineries, half with tasting rooms, are located in the area, which drives significant tourism to the region. Lodi is also home to the nation’s fastest growing brands, Seven Deadly Zins and the Jewel Collection.
Lodi has a population of approximately 63,000, within just over 13 square miles, its school district, retail, and medical hospital serve an estimated 175,000 customers. The largest employers in the city include the Lodi Unified School District, Lodi Memorial Hospital, Pacific Coast Producers, Blue Shield of California and General Mills.
The property is located in a predominantly suburban neighborhood in Lodi comprised primarily of single family homes. The property is particularly appealing due to its location being within half-a-mile of several large parks, schools, the General Mills Plant, and the Lakewood Mall Shopping Center.