Real Estate
Manhattan Beach Luxury Home Financing
Growth ROI
0.8%-0.82%
Target term
9-12 months
Equity
Technology Opportunities Fund
Fund Size:
$441M
Term
12 months
Returns & Management fees
Ann'l management fee
Portfolio based
Daily ROI
0.8% - 0.82%
15% interest payable
monthly
Schedule
Minimum deposit
$10,000
Payment schedule
Daily interest
Investment term
9 - 12 months
Structure
Growth distribution
Available
Capital reimbursement
Available
Interest varies over investment term
Daily payments
Investors should receive distributions on a daily basis
Income
Expected to generate regular daily income payments.
Overview
An opportunity to target steady income monthly by investing in a first mortgage loan backed by two luxury properties in Manhattan Beach, California.
Substantial equity cushion
According to third-party appraisals, this investment offers appealing downside protection with a loan-to-value ratio of 34%. This helps to safeguard investors’ investments by giving them a conservative implied equity cushion of 66% at closing.
Luxury collateral
The loan is secured by two luxury properties in one of the most sought-after neighborhoods in the greater Los Angeles area, one of which is on the beach and the other one is a block away.
Repeat Originator
With VENT Finance Group (“VENT”) as the originator, LGMCORP has made 20 investment offers thus far. The principal of all 19 matured offerings has been fully returned; just one transaction is still open and is operating as anticipated. Since Vent will keep a piece of the loan alongside LGMCORP, it has a stake in a positive outcome.
Consistent income
Investors can lock in a minimum target yield for the duration of the investment owing to the loan’s floor structure. Given the anticipated upcoming more rate cuts by the Fed, we believe that the rate floor offers improved value.
Monitoring the Wildfires in Los Angeles
As of January 9, the Palisades Fire is around 14 miles from the homes, and there are no ongoing evacuation orders for Manhattan Beach. LGMCORP and the Originator are keeping a close eye on the wildfire situation in Los Angeles.
We will provide updates as we have significant information about the situation.
Premise
Investing details
- Engage in a $12 million first mortgage loan that is backed by two luxury single-family homes located in Manhattan Beach, California.
- The properties were valued for $35 million in June 2024 after being bought for a total of about $15.2 million in 2013 and 2015.
- It is anticipated that the investment's interest would be paid daily. At loan maturity, principal is supposed to be repaid through property sales or refinances.
- On November 14, 2024, LGMCORP's senior loan investment is anticipated to close.
Investment strategy
Downside protection
Loan-to-value ratios for first mortgage residential loans are generally around 85% (i.e., equity cushions about 20%). In the event that the borrower defaults and the properties are liquidated to pay back investors, this investment provides significant downside protection with a loan-to-value ratio of 34%.
Minimum target yield
Investors can lock in a minimum target yield owing to the loan’s coupon floor structure. For the term of the investment, the targeted net daily yield is therefore expected to be constant at 0.8%. This is particularly appealing in light of the Fed’s current interest rate cut of 25 basis points (0.25%) and the likelihood of more cuts in the future.
Real estate portfolio diversifier
The majority of real estate investments on the LGMCORP platform are associated with multi-family or commercial properties. With single-family homes, this loan offers you an opportunity to diversify your real estate holdings.
Behind the investment
Who is the Originator?
- VENT Finance Group, which was established in 2003 and has its headquarters in Seattle, Washington, offers real estate bridge financing to borrowers that are in need of quick cash or are working on short-term, transitional projects.
- As of June 2024, VENT had originated more than $400 million in 140 loans since its inception.
- As of November 2024, LGMCORP has made 20 previous investment offers to the Originator. All 19 of VENT's matured investments have fully repaid their principle, with the exception of one transaction that is still pending and operating as planned.
Who is the Borrower?
- The borrower is a wealthy couple with a net worth of over $142 million who are based in Malaysia and have substantial commercial interests.
- Through Dennis Rive Associates, LGMCORP and VENT conducted a thorough background investigation on the borrower.
Market commentary
- Manhattan Beach is a popular beachside neighborhood beneath Marina Del Rey and Santa Monica on the Los Angeles coast.
- The homes are located close to schools, retail shopping malls, and employment hubs.
- Redfin asserts that the real estate market in Manhattan Beach is characterized by strong demand and little supply, which fosters a good climate for property values.
- Additionally, recent Manhattan Beach sales data supports the senior loan collateral basis, which might give investors a larger equity cushion and protection against the downside.
Essentials
Capital structure
- In the first mortgage loan, LGMCORP and one of its affiliates intend to buy a total $9.5M participation interest, with VENT retaining the balance of $2.5M in their fund.
- In addition, $23 million in implied equity will belong to the borrower and be subordinate to LGMCORP's involvement in the first mortgage transaction.
Cash flow
- The loan has a fixed interest rate for the first six months, after which it will change to a variable rate with monthly interest payments expected.
- Daily interest payments are expected to be made to LGMCORP investors beginning in March 2025.
- After which, investors receive the remaining earnings.
Subscription process
- As funding arrives at LGMCORP, the offering is expected to perform daily internal closings.
- Electronic transfer via external wallet: Funding is expected to be debited from your external wallet after completing your investment application. It is expected to take a maximum of five hours for funding to arrive at LGMCORP and your investment to be confirmed.
- Before making an investment request, please ensure that you have sufficient funding in your external wallet.
Accessibility
- This offering is available to all account types.
Returns & Management fees
Ann'l management fee
Portfolio based
Daily ROI
0.8% - 0.82%
15% interest payable
monthly
Schedule
Minimum deposit
$10,000
Payment schedule
Daily interest
Investment term
9 - 12 months
Structure
Growth distribution
Available
Capital reimbursement
Available
Interest varies over investment term
Daily payments
Investors should receive distributions on a daily basis
Income
Expected to generate regular daily income payments.
Portfolio Manager
Frida Guillermo
Head of Portfolio
