Halcyon Capital Solutions

Investor’s
Prospectus
Halcyon Capital Solutions
Phone: 877.427.9820
818.276.6070
Fax: 818.332.4260
www.hcsequity.com
DRE
DRE##01877747
0187774
HALCYON CAPITAL SOLUTIONS
Halcyon Capital Solutions is a private equity lending company whose goal is to provide
low-risk real estate investment opportunities with an above average rate of return.
Commitment to Protection and Growth
Halcyon’s founders have extensive experience in risk management and property
assessment. The focus of the firm is on asset preservation and steady, long-term returns.
The company adheres to conservative and proven lending techniques through a process
of extensive research, diligent underwriting, and partnering with trusted industry
associates. Halcyon locates and evaluates transactions with solid investment potential for
sophisticated investors.
•
Historically, real estate investments yield substantially higher rates of return
compared to other low-risk investments.
•
Halcyon does not take possession of the note or deed. Individual Investors or
their entities are recorded on all deeds as the direct beneficiary of the lien.
•
Halcyon is not a holding company, and never directly controls the Investor's
funds. Halcyon offers transparent trust accounting through third-party note
servicing.
•
Managing Partners are active participants in transactions originated through
Halcyon.
•
Different opportunities are offered to suit varying participation levels. An investor
can share in a fractionized loan or own an entire note. *
•
Investments can be held by trusts, LLC’s, corporations, individuals, or retirement
accounts. **
Funding Your Investment
In addition to traditional methods, many Investors enjoy tax-free returns by holding the
trust deed inside self-directed retirement accounts*, which can be funded either by rollover
from an existing custodian account or with new assets. Monthly payments are forwarded
directly into the Investor’s account, and interest accumulates without incurring tax
penalties or early withdrawal fees.
* See Frequently Asked Questions
** Please consult with tax professional to ensure eligibility.
Contact Halcyon Capital Solutions
Halcyon Capital Solutions has a proven track record of providing investment opportunities
that yield significant returns.
Please contact us to schedule a meeting to discuss how private equity investment
strategies might fit into your investment goals.
Justin Aldi, Managing Partner
Jordan Must, Managing Partner
Phone: 818.276.6072
Phone: 818.276.6073
Cell:
Cell:
818.402.2101
Email: [email protected]
818.581.5792
Email: [email protected]
HALCYON CAPITAL SOLUTIONS "SECURITY IN SERVICING"
Halcyon Capital Solutions believes in complete transparency in trust accounting. In
addition, by working with neutral third-party companies for all escrow and servicing
requirements, the potential for any possible conflict of interest is eliminated.
Evergreen Note Servicing, our preferred servicing company, is an independent firm with
over 12,000 loans serviced and more than thirty years experience in the loan industry.
Among the many benefits of using an outside firm for note servicing are:
•
All Borrower payments are processed and reconciled within 24 hours of receipt,
assuring that Investors receive monthly payments almost instantly.
•
Easy to use website with 24-hour access to all account information.
•
Separate trust accounting.
•
Investor receives e-mail updates regarding payment activity, late payments, etc.
•
Accurate record keeping.
•
Detailed year-end statements and tax information.
•
The service provider handles all contact with Borrower, including late payments,
change of address, and other details.
•
Service provider carries over $1,000,000 in Errors and Omissions insurance,
and over $1,000,000 insurance bond.
•
Service provider handles all loan payoffs.
Halcyon Capital Solutions "Security In Servicing", cont.
Sample Summary
Sample Payment
Sample History
FREQUENTLY ASKED QUESTIONS
Who are the Borrowers and why do they come to Halcyon Capital Solutions?
In the current restricted credit environment, if a loan transaction does not fit the exact
guidelines of Fannie, Freddie, or FHA there are simply no traditional bank options
available. Many borrowers have substantial equity in their properties but have insufficient
income documentation, credit scores, or an overall scenario that just does not fit.
Halcyon Capital Solutions is able to quickly underwrite these transactions based on the
property and our internal risk assessment policies, lending private equity to fill this need.
What types of properties do Borrowers seek loans for?
Borrowers seek loans for various types of properties, including commercial, investment,
single-family, multi-family, mixed use, and rehabs (fixer-uppers).
Where are the properties located?
All properties are located in California, with the majority in the Los Angeles area. The
managing partners of Halcyon have extensive experience in this area’s real estate market,
and have handled thousands of loans for Borrowers since 1997.
What types of loans are available to Borrowers?
Most loans have a fixed term of 1-3 years and are adjustable thereafter, with a balloon
payment due at the end of the 5-year term. They are written with interest-only payment
options and no pre-payment penalty. Loans are not written for non-profit locations
(churches, community centers) or other high-risk properties such as gas stations that may
have environmental concerns.
How are properties evaluated?
Properties are fully underwritten for current and potential income, and chances of a loss of
income, resale value, current property conditions, environmental concerns, neighborhood
trends, conforming use, and the ability to liquidate the property in a timely fashion (the
value of the property if it had to be sold on the open market within a 30-day time frame.)
How do Investors learn about these investment opportunities?
Halcyon sends "potential deal summaries" to Investors via email or fax. These notices
provide information such as location, type of property, purchase price, loan terms, loan
amount and rate of return to investor.
What are the guidelines to be a "qualified investor”?
The amount of the loan cannot exceed 10% of the investor's net worth, exclusive of home,
furnishings and automobiles OR the amount of the loan cannot exceed 10% of the
investor's adjusted gross income for federal tax purposes for the last tax year or as
estimated for the current year.
What LTV (loan-to-value) ratio are the loans offered by Halcyon?
All loans are secured with large amounts of equity, typically a maximum of 50-55% of the
current, conservative property value.
What types of investment products can an investor purchase?
Halcyon offers 1st and 2nd trust deeds secured by one or multiple properties. Investors can
participate as a whole loan investor or share their interest in the trust deed with other
investors.
A whole loan investor owns 100% of the trust deed and invests the entire amount for the
term of the loan.
Halcyon will also fractionalize trust deeds to provide investors the opportunity to participate
in larger deeds or divide their investment among several borrowers.
What rate of return does Halcyon offer?
Depending on the type of investment selected, the current rate of return varies. Investor
yields average between 8.5% and 11%. This rate of return is protected against inflationary
concerns due to the short-term nature of the fixed rate term on the loan.
Who collects the borrower's monthly payments?
A neutral third-party company performs all note servicing. Our preferred servicing
company is an independent firm with over thirty years experience in the loan industry.
How do I receive my investment return?
Investors receive monthly disbursements of the interest on the loan either by check or
direct deposit directly from the servicing company.
Will I have access to my investment if I need to make a withdrawal?
Principal is only returned upon the payoff of the loan; however an active secondary market
exists for the resale of trust deeds. Halcyon has an extensive network of investors that we
can access to assist with the liquidation of a trust deed.
Can I invest my IRA or Pension Plan?
Yes. Eligible retirement accounts include Traditional IRA, Roth IRA, SEP/IRA, Keogh
Plans, Profit Sharing Plans, and Defined Benefit Pension Plans. *
* Please consult with tax professional to ensure eligibility.
How does Halcyon make money?
Halcyon charges the Borrower points on the loan, and also makes a spread on the interest
rate charged to the Borrowers compared to what the Investor receives. That amount is
paid directly by the servicing company to Halcyon on a monthly basis as the Borrower
makes payments.
Occasionally the front end points may be shared with the Investors to increase the APY
(annual percentage yield) on short-term loans. Each loan is negotiated with the individual
Investor.
In addition, the Borrower is charged certain normal and customary fees for loan
documents and underwriting associated with each transaction.
What happens if a Borrower defaults on a loan?
Halcyon performs extensive due diligence before issuing any loan to make certain
borrowers are able to fulfill their monthly obligations. However, in the unlikely event a
property must be taken over, Halcyon's strict underwriting standards limit the possibility of
loss on the principal investment. In such an event, Halcyon would engage the services of
a foreclosure expert on behalf of the investor.
HALCYON CAPITAL SOLUTIONS EXECUTIVE MANAGEMENT
Justin Aldi, Managing Partner
Justin Aldi is a nationally recognized mortgage industry expert with
more than twelve years experience as CEO of a top-ten residential
and commercial mortgage bank, handling fundings of over $1 billion per year.
A licensed mortgage lender in residential and commercial real estate since 1997, Mr. Aldi
has hands-on experience with all levels of the mortgage process from front-end origination
to long term servicing. He has been featured in numerous financial publications, including
Fortune Magazine, the New York Times, Smart Business Magazine, Broker Banker
Magazine, and National Mortgage Broker Magazine.
Mr. Aldi's insight and low level of risk tolerance allow him to direct investors' funds to safe
and secure deals. He has a startling yet simple recipe for success: "Honesty, dedication
to our clients, and good old-fashioned hard work."
He currently lives in Toluca Lake with his wife and twins. In his spare time, he collects
vintage cars and trucks and is an active member of several car clubs and museums.
HALCYON CAPITAL SOLUTIONS EXECUTIVE MANAGEMENT
Jordan Must, Managing Partner
As co-founder of Halcyon Capital Solutions, Jordan Must has been a
successful private money investor for nearly a decade. He is well
known in the mortgage industry, having run the banking divisions for
two large financial institutions.
A certified FHA underwriter, his background in risk management and underwriting
contributes to his expertise in determining loan viability, valuations, borrower risk factors
and fraud. Since 2005, Mr. Must has overseen mortgage transactions totaling more than
$3 billion.
He strongly believes in two key rules when it comes to investing:
•
Rule 1 – “Don’t lose money.”
•
Rule 2 – “Never forget Rule 1”.
This focus on asset preservation and steady returns carries over to Halcyon’s underwriting
mentality.
Mr. Must, a graduate of UCLA, currently resides in Los Angeles and enjoys playing
basketball, reading economic history and theory, and collecting mechanical watches.
Loan Summary
2004
Property type:
Property details:
Description:
Single-family residence in Santa Clarita, CA
6 bedroom, 4.5 bath. 4,508 square foot home
built in 2004. Custom cabinets, travertine
floors, granite counters. Located in the Tesoro
PUD
Non-owner occupied purchase loan, primary
borrower is self-employed and unable to
qualify for a conventional loan. Current
mortgages all have excellent payment history.
Purchase price:
$940,000
Loan amount:
$510,000
Loan terms:
9.99% rate, 3-year fixed with
interest-only payments. 5 year
balloon with year 4 and 5
adjustable at LIBOR plus a
margin of 7.99%
Loan Summary
2004
Property type:
36-unit apartment building in Los Angeles, CA
Value:
$3,000,000
Property details:
24 one bedroom, 9 two bedroom, three 3
bedroom units. Property condition is average
for the area. Monthly gross rents exceed 35k
per month.
Loan amount:
$450,000
Description:
Current balance of 1st mortgage is 840k,
combined LTV of 43%. Borrower needed to
pay off an exisiting 2nd note that had come due.
A+ credit and mortgage history.
Loan terms:
2nd trust deed. 11% rate, 3year fixed with interest-only
payments. 5 year balloon with
year 4 and 5 adjustable at
LIBOR plus a margin of 7.99%
Loan Summary
Property type:
Property details:
Industrial stand-alone warehouse in Commerce, CA
4,000 square foot warehouse, built in 1949 and
maintained in good condition. Zoned M2 and
currently tenant-occupied.
Value of property
$450,000
Loan amount:
$150,000
Loan terms:
Description:
Property was listed for sale at $511,00. Borrowers
needed an immediate loan to finish the purchase of
another property. Average credit with no
mortgage delinquencies.
10% rate, 3-year fixed with
interest-only payments. 5 year
balloon with year 4 and 5
adjustable at LIBOR plus a
margin of 7.99%