A friend who used to write for newspapers once did an article on the local options consumers have if they need to borrow money. He was writing a “first person” article and his research took him into a pawnshop.
He had a beautiful antique pocket watch that his girlfriend of the time had given him. It had been in her family for many years. It was gold and he figured if he took it into a pawnshop he could use it as collateral for a decent-sized loan.
The owner of the pawnshop looked it over and offered to loan $25 on the pocket watch. He was stunned and tried to convince the guy that it was really worth a lot more. Nothing he said caused the pawnshop owner to budge from his original figure of $25. The reporter slinked out of the pawnshop with a new appreciation for the importance of value.
Two things were happening here. First, my friend and his girlfriend had a poor understanding of the market value of the watch. Second, the pawnshop owner – who did know the market value of the watch – was wisely building in a safety margin for himself if the pawn ticket wasn’t repaid and he was forced to sell the watch.
The value of California real estate
At Evoque Lending, we’re like the pawnshop owner in many ways. We understand the market value of California real estate – especially in the areas where we specialize: Los Angeles, Orange County and San Francisco. We have been successfully helping our clients with First Trust Deed investing in those regions for more than 15 years.
Second, like the savvy pawnshop owner, we build a safety margin into all of the loans we make. We insist on some 40 percent of “protective equity” in every First Trust Deed that we write. This protects our investors in important two ways:
– Borrowers have significant equity in their properties. If they default, they stand to lose a lot of money. This motivates them to keep up their payments.
– If any borrower does default, there is sufficient equity in the property for the investor to recoup his or her money.
I said we were like the pawnshop owner in many ways. However, there are some important areas where we are different and one of these is critical to how we build safety into our First Trust Deeds. I’ll go over that area in detail in part two of this series.
In the meantime – or if you can’t wait for part two – give me a call and I’ll be glad to go over all the ways we look after the interests of our investors. I’ll also get you up-to-date on our current rates of return. Here’s a preview: If you’re looking for a safe investment that yields a double-digit ROI, we need to talk.
Lastly, at Evoque Lending, we’re focused on meeting the needs of our clients. To earn your repeat business and referrals, we understand that we must meet or exceed your expectations and we work hard to do that.
So please, call or drop me an email. You’ll be glad you did.