Loan Origination & Underwriting Process

Clear-Cut Loan Origination and Underwriting Process

We focus on originating short-term (i.e., three years or less) first mortgage loans and will continue to be responsible for each stage of the investment process.

Investment process

  • Sourcing deals from brokers, attorneys, bankers and other third party referral sources as well as from real estate owners, operators, developers and investors and through web-based advertising
  • Performing due diligence with respect to underwriting the loans
  • Executing the closing of the loan
  • Managing the loan post-closing
  • Undertaking risk management with respect to each loan and our aggregate portfolio

Assessing the Risks of the Investment

After identifying a particular lending opportunity, we perform financial, operational, legal due diligence of the borrower and its principals and evaluate the strength of the collateral to assess the risks of the investment. We analyze the opportunity and conduct follow-up due diligence as part of the underwriting process. As part of this process, one of the key factors that we consider is the borrower's exit plan for the property and the location and value of the property as collateral.

Evaluating the impact of each loan transaction

In evaluating the merits of any particular proposed loan transaction, we will also evaluate the impact of each loan transaction on our existing loan portfolio. In particular, we need to evaluate whether the new loan would cause our portfolio to be too heavily concentrated with, or cause too much risk exposure to, any one borrower, class of real estate, neighborhood, or other issues.

If we determine that a proposed investment presents excessive concentration risk, we will forego the opportunity. As a REIT, we will also need to determine the impact of each loan transaction on our ability to maintain our REIT qualification.