Latest News, 2019 Q3....

September was a busy, busy month for us. We closed Fund IV to investors at the end of August and bought some notes last month. We had significant movement in Fund III's portfolio.....

Fund IV Update

We raised a total of $1,150,000 at the end of August. Whoo hoo! We are extremely thankful to the investors that put their faith and trust in us and decided to place capital with us. We've assembled a fantastic little portfolio of loans and expect it to do very well.

September started out very smoothly and we identified 5 very good, non performing notes within the first week. We ended up closing on 4 out of the 5 by the end of the month. The 5th one was pulled by the seller at the last minute, which is a big "no no" in our industry, and resulted in killing the seller's possibility of ever doing future business with us or the broker who set up the trade.

We ultimately found a replacement loan and are currently in due diligence on that one.

The four that we bought are all in late stage foreclosure or in very fast non-judicial foreclosure states:

Collateral Location Purchase Price Status
1. SFR in Houston, TX $120,000 Post judgment; waiting on sale date
2. SFR in Dale City, VA $240,000 About to file NOD
3. SFR in Annetta, TX $440,000 Expected sale date 12/4/19
4. SFR in Pleasantville, NJ $60,000 Sale date held 9/26/19; REO

Coastline Capital Fund III, 2019Q2

All of our 12 assets have progressed toward liquidation:

  1. 3 REOs

    1. 1 REO in escrow

    2. 1 REO undergoing rehab

    3. 1 REO with eviction in progress

  2. 8 NPNs

    1. 5 notes post Judgment with upcoming sale dates

    2. 2 notes pre-Judgment

    3. 1 redefaulted note, 30+ days late

  3. 1 Reperforming Note with Borrower in CH 13 Bankuptcy

We expect to have 2-3 liquidations before the end of 2019. All but one or two should be liquidated by the end of summer, 2020.

The most noteworthy events happened with these three:

  1. Highland, CA - we were finally able to get a hold of the occupant and arrange cash for keys. Once inside, we discovered a windfall. The county assessor showed the condo as a 2 bedroom, 1 bathroom, with 801 square feet. Instead, the condo was actually a 2 bedroom, 2 bath plus a loft with 1128 square feet! Instead of selling this for $130k as we expected to, we are anticipating selling it for $170k!

  2. Homer Glen, IL - we knew that this note had issues with lien priority before we bought it but were not concerned because the title company was already fighting this in court. It took us three months to figure out that the title company was not really on our side and a few more months to find the right attorney to prepare a lawsuit for us. We filed a complaint against the title company for breach of contract (they waited 4 months before recording the mortgage). The title company responded by paying off the other mortgage, which will allow us to pursue foreclosure. We are currently in settlement talks over damages owed to us....

  3. Rancho Murieta, CA - The borrower on this note didn't make any payments for years. She did this by bullying her servicers with excessive complaints and filing bankruptcies to stop sales. She postponed our 1st sale date but not the 2nd with multiple bankruptcies. The judge ruled in our favor and annulled the automatic stay, which validated our trustee sale. We are currently evicting the borrower

 

The Latest Posts from "Andy's Stories:"

NPN Story: Multiple Bankruptcy Tricks

"I’ve gotten used to the shenanigans that borrowers will resort to stay in their homes without paying a thing or at least the smallest amount possible. This borrower used an unusual method for the bankruptcy that stopped our original trustee sale....."

Read more

NPN Story: Deed It Back

"Not all of our notes end up in foreclosure. Sometimes (rarely), we get a borrower that’s actively trying to figure out a solution to their situation. If someone reaches out to us in a good faith attempt, we will meet them halfway and there’s almost always something that we can do that’s a “win-win” for their particular situation."

Read more

NPN Story: What Easy Looks Like

"Not every note we buy involves a huge amount of drama. Not every note involves a deadbeat borrower who will do everything in their power to stay in their house as long as possible without paying a dime. Not every borrower files for bankruptcy to stop a sale. Some borrowers, for one of a number of reasons, decides not to fight and let’s things just happen. This is what it looks like when it’s easy."

Read More

New Blog: "Andy's Stories"

I started a new blog that will focus on my stories, experiences, adventures, and opinions. I want to tell the stories about my part of the non performing note business to educate, inform, and entertain. I want to provide value to potential investors in one of our Funds, other note investors, future business partners, vendors, friends and family. (My mom knows that I’m a note investor but has no idea what I actually do and this will be my way to let her know!)

Stories are a great way for those unfamiliar with non performing notes and note funds to learn while being entertained at the same time. During a conversation, I’ve been asked, “How is it possible that the borrower hasn’t made a single payment in 10 years and is still living in their house?” I reply, “It’s hard to believe but this is how these things happen…” People love these stories and the more loans I buy, the more interesting situations I come across and the more stories I have to share.

The old blog on this website called, “News,” will stay where it’s at and become just that. The posts there will tell you about the latest Funds that are available for investment, updates on the Funds that are liquidating assets, and so on. Information that’s important for the company but probably not as entertaining as you’ll find here.

For “Andy’s Stories” click on the page of the same name on our website or you can go direct to medium.com/@coastline_andy

Check it out. Let me know what you think by leaving a comment!

Fund III 2019Q2 Update

Last quarter was excellent for us! All 12 notes were successfully transferred to our servicers. We got all the notes back on track to resolutions. We had a couple of difficult notes where it wasn't clear the exact path to take or how to accomplish what we wanted to but we found solutions and they are mostly on auto-pilot now.

Two notes went to foreclosure sale and are now REOs. On one, the previous owner vacated and we are currently getting bids for the trash out and renovations. The other is still tenant occupied as we wait for a state mandated 90 day waiting period prior to eviction while we work on clearing title.

Two notes went re-performing. One is a borrower who filed Ch 13 Bankruptcy two days before the judicial sale. He's been paying right on time on the 1st of every month. Our strategy is to hold this for another 1-7 months and sell the note as a reperformer. We initiated foreclosure on the other note and the borrower responded by reinstating the loan, which means he paid all the back payments and fees, and had enough left over to make three additional payments. We'll hold this one for 1-7 months and sell as a reperformer.

We obtained judgments on two more notes and are within a month of getting judgment on one or two more. Getting a judgment is a significant milestone. It means that the bulk of the work has been done and that you've proved to the judge that you have the evidence and right to foreclose. Following the judgment is a redemption period, followed by a sale date, and confirmation of sale. Typically, the borrower's last defense is to file bankruptcy but their opportunity to fight is severely diminished.

By obtaining a judgment, we've increased the value of our note since the hard work has been done. We will put the two reperforming notes and the two notes with judgments out for bid and see what the market is willing to pay for them. If the returns are good, we will sell some or all of these.

Investors in Coastline Capital Fund III get loan level reports with greater detail every quarter.

Preferred Return Now Accruing for Fund IV!

Yesterday, July 8th, 2019, we surpassed the Minimum Fund Offering of $500,000, which means that the Preferred Return of 8% is accruing for all investors. We've raised $610,000 (money in the bank) with verbal commitments of $70,000 to $300,000 in the next few weeks.

We will close the Fund to Investors on August 31st, 2019, or sooner. We won't hold it open longer, now that the Preferred Return is accruing. We'll raise as much as we possibly can with a quick turnaround to purchase as many non-performing notes as we are able to in September.

Don't let your money sit idle in a checking or savings account earning little interest. If you've been considering an investment with us, put your money to work accruing a preferred return until we're ready to go!

Visit Coastline Capital Fund IV to see details.

Coastline Capital Fund IV is Open to Investors!!

Coastline Capital Fund IV  is an unregistered security issued under a Regulation D, 506(c) exemption and is available to Accredited Investors only. The Fund opened to investors April 15, 2019 and will remain open until July 31, 2019, unless we close it sooner. The Fund offers an 8% Preferred Return and a 50% Profit Split to the Investor. The minimum investment is $50,000 (which can be waived at management's discretion). The minimum Fund Offering is $500,000, which means that when we raise that amount, the 8% preferred return starts accruing. The maximum amount we're looking to raise is $5 million. The Fund is a single purpose, non-leveraged, close-ended investment, designed to generate returns for its investors with a limited time commitment. The Fund will liquidate all assets within three years of the date that the Fund closes to new investors.   

We're using a different website platform for this new Fund and are excited to roll it out. The new platform will:

  • Present the investment opportunity more clearly and concisely.

  • Integrate with Invest Ready, a 3rd party, independent, accredited investor verification website.

  • Integrate with bank accounts, which will allow us to ACH payments/distributions to the investors. No more wire fees or delays waiting for checks to arrive.

  • Provide statements and analytics for your investment through an investor portal.

March 2019

It's been a great beginning of the year for us so far! We completed the bulk of our buying for Coastline Capital Fund III. We're about to sell the last asset from Fund II. And we're gearing up to start up Fund IV next month!

 Coastline Capital Fund III Update:

We raised $1,590,000 for Fund III, which closed to new investors on December 1st, 2018. Since then, we’ve used $1,397,769 to purchase 11 notes with $2,259,835 in Unpaid Principal Balance (UPB). The notes are backed by property in the states of California (2), Illinois (6), Wisconsin (1), Tennessee (1), and Texas (1). We have enough to buy one or two more notes and are looking to do so in the next week or two. We’re very pleased with the notes that we were able to carefully select from our sellers and expect to do well with them.

We've provided detailed information on these notes including addresses, liquidation strategies, purchase price, and comments to the investors in Fund III. As notes liquidate, I'll provide additional details for readers of this newsletter.

Of the 11 that we purchased, one already has a sale date later this month and several more are on track with probable foreclosure sale dates within the next 6 months. Six are still in interim servicing but we don't wait longer than we have to before we start "righting the ship," my term for getting non-performing notes that have stalled, back on track to foreclosure or other resolution.

We've reached out to all of the foreclosing attorneys and trustees to provide a smooth transition and to make sure that they have everything that they need to proceed with foreclosure. Usually, that means they need specific documents, which cause delays for months and years, in a few cases. We straighten out miscommunications and are persistent in getting needed documents to the appropriate vendors as soon as possible.

We've also offered short sale, foreclosure by consent, and deed in lieu/cash for keys options to most of the borrowers. These options may work better for the borrower by letting them get out of a situation that is too much for them to handle while minimizing the damage to their credit and allowing them to move on with their lives.

We'll keep you updated on the progress of these notes!
 
Coastline Capital Fund IV
 
We are getting things ready to launch Fund IV next month. Tentative opening date for the next Fund is April 1st, 2019, and the closing date to investors is June 30th, 2019. This will be a 506(c) offering like Fund III, which means it will be open to accredited investors only. The terms are being finalized but it will most likely be similar to Fund III in that it will offer a Preferred Return and a Profit Split. 

We are looking into using a different web based platform that is more robust and streamlined than the system we are using now. Details to come later!
 
Coastline Capital Fund II Update:

Fund II should be completely liquidated next week.
 
Our REO in Chula Vista, CA is scheduled to close escrow next week. Even though this market had flattened out with little activity from Fall, 2018 to January, 2019, we remained patient and left our listing price alone as we were competitively priced. Our patience was rewarded with an above list offer from a motivated buyer. 
 
Sean and I made the decision to sell the REO in New Bern, NC at whatever the market could bear. At the end of last summer, we had just completed a light rehab of the house when Hurricane Florence hit the east coast. New Bern, NC, was one of the hardest hit areas. Our house sustained significant damage from flooding. After exploring different possible strategies, we decided to sell "as is," recover as much money as possible, and move on to the next Fund and the next deals. We sold it for a loss at the end of January, 2019, but, thankfully, the gains from the other 4 notes in the portfolio make up for it.

Once Chula Vista closes, I'll finalize the numbers for Fund II and present them in another newsletter.
 

January 2019 Update

Coastline Capital Fund III Update:

 We successfully raised $1.6 million for this Fund in December, 2018! We were able to purchase 2 non-performing notes before the end of the year. We’re getting tapes from our sellers now and expect to bid, perform due diligence, and purchase non-performing notes with the remaining investable capital by the end of January. 

The two notes that we bought are both in the Chicago, Illinois area. One should go to sale within the next 60 days. We’re about to get a judgment for foreclosure for the other one which puts us about 4 months away from liquidation.

 We’d like to thank the investors that contributed capital to let us make Fund III happen! We look forward to getting the best assets possible, liquidate, and return as much profit as we can….

 

Next Fund?

 If you didn’t invest in Fund III, there will be another opportunity to invest with us later this year. Once we complete our buying for Fund III, we will make plans for opening our next Fund. Tentative opening date for the next Fund is April 1st, 2019, which would tentatively close to investors June 30th, 2019. We want to take the previous year’s experience, investor feedback, and potential future investor interest into account so that we can make our next Fund is better than the last one.

 Let us know if you’d be interested in future opportunities.

 

Coastline Capital Fund II Update:

We were hoping to have Fund II wrapped up by the end of last year but we still have two assets left to liquidate.

Our REO in Chula Vista, CA has had no offers on it and we’ve been experiencing the flattening of the market in the San Diego market. In about October, 2018, the market flipped from low inventory and homes being sold quickly to much higher inventory and properties sitting on the market. It’s a good property in a good neighborhood and it will sell, just later than we expected it to.

Our REO in New Bern, NC, has also been sitting on the market. We are looking at different liquidation options and are working to get this taken care of as soon as possible.

 

Webinar Power Point Presentation followed by Q&A with the Sponsors of Fund III

We presented a webinar on Wednesday, November 7th that went into detail on the most important aspects of that Private Placement Offering. We discussed the opportunity and profit potential of investing in non-performing notes, our competitive advantages, our strategies on liquidations, and current and past liquidations of notes. We showed projected performances of non-performing note investments as well as what the return looks like to the investor.

Although Fund III is now closed to new investors, this can still be useful to you if you’re considering investing in one of our future funds.

Click here to access the webinar presentation.

Successful First Webinar!

Hey, we did it and are excited at how the Webinar turned out! On November 7th, 2018 at 11 am PST, we got a lot of good information out there to folks about Coastline Capital Fund III and we hope that people found the information useful. Even better if it motivated some investors to join us in purchasing and liquidating some non performing notes!

Click on this link to see and hear our webinar about investing in Coastline Capital Fund III.

Remember, time is running out to invest in this fund. The deadline is December 1st, 2018.

Fund III Webinar Presentation, November 7th, 2018, at 11 am PST

We will present a webinar on Wednesday, November 7th, at 11 am Pacific Standard Time that will go into detail on the most important aspects of the Private Placement Offering for Coastline Capital Fund III. We will discuss the opportunity and profit potential of investing in non performing notes, our competitive advantages, our strategies on liquidations, and current and past liquidations of notes. We will show projected performances of non performing note investments as well as what the return looks like to the investor.

If you have been considering an investment before but needed more information, this will be perfect for you. Following the presentation, we will answer questions from potential investors. You can ask questions at that time directly or send them to me by e-mail.

The deadline for investing is December 1st, 2018. After that date, we will no longer accept investors for Fund III and will proceed to purchase one or more pools of non performing notes before the end of the year.

Click here to register for the webinar.

October 2018 Updates

Fund Management: 

Most of our efforts are going into raising capital for Fund III. The management requirements for our remaining assets is low. We are getting bids on a couple of reperforming notes, waiting for buyers to put in offers on one of our Savannah flips, and finishing up the rehab on our last flip in Savannah. 

 

Coastline Capital Fund II Update: 

We have three remaining assets that we hope to liquidate in the next couple of months. We did a quick trashout of our REO in Enid, OK, and went into contract within 2 weeks. The house had been abandoned along with piles and piles of junk and hadn’t been updated in decades. We believed that the rehab would be best left to a local investor or homeowner who could begin with a fresh slate. We’re scheduled to close escrow by the end of the month. 

Hurricane Florence hit New Bern, NC, hard and was the subject of numerous news reports. We had completed a light rehab about three days before Florence hit and were hoping that it would avoid us but the downgraded Hurricane dumped tons of water all over New Bern. Our REO ended up getting flooded by a foot of water but this receded shortly after the storm left. Luckily for us, the damage was not nearly as bad as it could have been. We’re having to put about the same amount in to repair the damage as we did for that first light rehab. 

The property was not located in a flood zone so we didn’t carry extra flood insurance so our existing policy didn’t cover the damage. There’s not much you can do for a rare event such as this, except have the cash reserves set aside to make repairs quickly. We bought the note at a great price and will still be profitable, although the profit will be smaller than anticipated. This is another example why investing in a Fund makes a lot of sense since you spread the risk among many assets and are better able to withstand the occasional loss.

We’re sensing that the market is softening in the Chula Vista area. More homes are coming on the market and properties are sitting on the market longer. Our agent for our Chula Vista REO added that buyers are becoming a lot choosier and taking their time to purchase a home. We’ve responded by doing a price reduction and closely monitoring the market. We’ve priced the townhome near the bottom of the market, which makes it a great deal for some lucky homebuyer in the area! 

Click here to see the listing on Zillow.

September 2018 Fund Updates

Coastline Capital Fund II Update:

We finished the rehab on our REOs in Chula Vista, CA and New Bern, NC. We’re getting quotes for staging for Chula Vista and waiting for the incoming hurricane to pass for New Bern before listing them for sale. Hopefully, they will go quick!

The court confirmed the sheriff’s sale for our REO in Enid, OK. This one is definitely a fixer that would do better in the hands of a local investor. We’re doing a trash out and some minor landscaping before listing it “as is.”

As soon as these REOs sell, we’ll post some numbers on the final returns.

September marks the first month that our investors received checks to go back toward paying their initial investments in the Fund. The next couple of months will see more checks that will include the remainder of their initial investments plus their accrued preferred returns and finally the profit split.

 

Coastline Capital Fund Management News:

We closed another REO in Cicero, Illinois last month and another REO (condo) is scheduled to close at the end of the month in Forest Park, Illinois. We continue to manage the remaining assets we have with our previous joint venture partners. We are focused on raising capital for Coastline Capital Fund III and are looking forward to reaching the minimum offering amount soon.

August 2018 Fund Updates

Coastline Capital Fund Management News:

We continue to liquidate our remaining notes and REO’s. Two REO’s are scheduled to close this month and we are receiving offers on one of our fix and flip rehabs in Savannah, GA. It’s not in contract yet so it’s still available for the buy and hold or vacation rental investor:

309 E 37th St, Savannah, GA

We’re focusing our efforts on raising capital for Coastline Capital Fund III and winding down Coastline Capital Fund II. We’re excited that we’ll be able to close Fund II soon (this Fall) and want to show potential investors what we can accomplish in hard numbers in so little time.

Coastline Capital Fund II Update:

July has been a great month for the Fund!

We sold our Chicago loan to another note buying fund for an 88.7% annualized return.

Our Enid, OK note went to Sheriff’s Sale but no one bid on the property so this one will come back to us as an REO. After doing some research, the best course of action will be to sell the property “as is.”  We’ll make a great return and leave plenty of room for the next investor to fix it up and make a profit as well. The property is in a great location and should sell quickly.

The former owner of the New Bern, NC property never responded to any of our attempts to communicate so, unfortunately, we had to proceed with eviction. The sheriff successfully conducted the eviction at the end of July. The property is in very good condition and will require a light renovation. Coastline Capital Asset Management (“CCAM”) is currently getting an updated value on the property, developing a marketing plan, and getting bids from contractors.

CCAM engaged with a local real estate and conducted a successful “cash for keys” transaction with the former owner of the Chula Vista, CA property. We’re fortunate that this property is also in great shape. We’re going to get it painted, install new carpeting, and do minor fixes. The real estate market in the area shows that everything sells within 30 days so ours will sell quickly.

At this point, the Fund no longer owns any notes, just REOs’s. We expect to sell everything by the Fall and close up the Fund!

Changes to Definition of Accredited Investors

There's hope that the definition of accredited investors will change in the near future. The House overwhelmingly passed JOBS Act 3.0 on a bipartisan basis by 400+ votes. With this amount of support, the Senate will surely pass it as well and Trump will probably sign it into law. The definition of accredited investor will be updated to include "an individual determined by the Securities and Exchange Commission (SEC) to have qualifying education or experience." Hopefully, that will mean that more people will qualify as accredited investors and be able to invest in opportunities that were previously unavailable to them.

 

See the story from Housing Wire and a link to the bill in Congress:

https://www.housingwire.com/articles/46106-house-p...

https://www.housingwire.com/articles/46085-waters-...

Congress Bill H.R. 1585

I've got my fingers crossed! Not only will this help my business but I think it's more fair for everybody.....

 

Hedge Funds Continue to Buy Single Family Home Rentals

This story is from the Wall Street Journal:

https://www.wsj.com/articles/house-money-wall-street-is-raising-more-cash-than-ever-for-its-rental-home-gambit-1531128600?mod=searchresults&page=1&pos=1

On a personal level, I bought a lot of condos at trustee sales here in California from 2011-2013. Back then, the hedge funds were everywhere and buying whatever they could and I heard that a big part of their strategy was to hold the properties as rentals instead of flipping them.

I went to a trustee sale in 2015 and these institutional buyers were gone. A lot fewer buyers showed up and all of them appeared to be local investors or investment companies. Prices went up too much in California for rental yields to make any sense.

I've heard that funds are buying up REOs in Memphis and Nashville, Tennessee. We just sold a re-performing note we had out there. The property was worth $80k and the Principal and Interest (P&I) payment was less than $500 per month. The rent for the borrowers house would be $800-$1000 per month. She was motivated to her make her payments and we're glad that she did. She knew that she would have to pay a lot more if she lost the house and had to move.

I'm sure there a lot of other parts of the country where rentals still represent a great investment opportunity.

With our notes, we know that if the housing market had a terrible drop like it did during the crash, that we could foreclose, fix up our REO, and rent it out until the market recovered. It's a last option but it's nice to know that we have that option in case we need it.

 

Summer Edition Updates

Coastline Capital Fund Management Updates

June was a great month for our Funds and the notes we own and manage through joint ventures. Two of our REOs (Real Estate Owned) in Illinois went into contract and should close in July.

We also sold a non-performing note that we were able to get re-performing for a great return. We talked to the borrower to address consistent late payments and discovered that she received income and had to make certain payments for her business at certain times of the month that made it difficult for her to make the loan payment on the 1st day. We changed her due date to the middle of the month, which helped her and us by ensuring that she had no more late payments. A win-win for us both.

For our Notes in Coastline Capital Fund II:

"Cash for keys" is commonly used to refer to the situation in which the occupant of a house agrees to move out after 30-45 days, leaving the property in broom swept condition, in exchange for a cash payout from the new owner. It's a win-win situation since the owner gets the property without risk of damage or vandalism and does not have to go through the eviction process and the former occupant gets money for moving costs, etc, and does not get an eviction on their record.

We reached a cash for keys agreement with the former owner of our Chula Vista REO. He’s scheduled to move out in mid-July. We’re happy about getting this one back and selling it at the middle of the summer buying season. The latest Case-Schiller report indicates that the San Diego housing market went up 7.8% year over year so we’ll get to benefit from that and be able to sell for a higher price than we anticipated when we bought this note.

Our note in Enid, OK, will go to Sheriff’s Sale in late July. It will be interesting to see if this sells at the sale or if we’ll get it back as an REO. The older house is vacant and abandoned and is best as a teardown. It has a great location across from a country club and is adjacent to newer, 3000-5000 square foot homes. If we get it as an REO, the best course of action might be to subdivide the lot and sell to a builder. We’ll know later this month what direction we’ll take.

We received the Trustee’s Deed Upon Sale for our note in New Bern, NC. The former occupant appeared to be moving her things out but hasn’t responded to our attempts to communicate with her. Unfortunately, it appears that we’ll have to evict her and are waiting for the final court documents before proceeding.

We are in the process of selling our note in Chicago, Illinois. We bought it at a deep discount and calculated that we can get a great return selling it now instead of going through the rest of the foreclosure process and dealing with a potential eviction and rehab before the onset of the slow winter season. This also allows us to cash out and get money back to our investors more quickly.

Fund III

We’ve received a lot of interest in Coastline Capital Fund III. We’re hoping to get our first investors to commit capital this month. Once we reach the minimum offering level of $1,000,000, we will most likely keep the Fund open for another 30 days before closing it to investors and commencing to buy one or more pools of non-performing notes.

Coastline Capital Fund III is available to Accredited Investors and offers a Preferred Return and Profit Split of the upside. Visit our website to learn more:

www.coastlinecapitalfund3.com

Other News of Interest:

Fannie just sold a billion dollar plus non-performing note pool last month. There’s still a lot of non-performing notes out there, which represents an on ongoing opportunity for note investors like ourselves. Click here for the story.

Coastline Capital Fund II Update

It’s been an eventful month for Coastline Capital Fund II. We’ve had one liquidation and two notes come back as REO. The other two notes are continuing to progress to foreclosure.

Our note in Durham, NC, went to foreclosure sale in April and had two upset bids after the sale. The winning bidder funded the purchase last week. Everything is scheduled to finalize by the end of the week and we will get a full payoff. The annualized ROI for this note is 94.1%!

Our note in New Bern, NC, went to foreclosure sale and there were no upset bidders so we’re getting this one back as an REO. We’ll hand this over to our sister company, Coastline Capital Asset Management. They will work on getting a real estate agent to make contact with the occupant, arrange cash for keys, if necessary, get bids and oversee any rehab, and list the property for full retail value.

The borrower delayed the foreclosure for our note in Chula Vista, CA, using unethical transfer and bankruptcy tactics. Unfortunately, some borrowers will take advantage and abuse our legal and bankruptcy system to stay in properties as long as possible while paying the minimum amount possible. We have a good handle on these types of gambits and our attorney was able to get us relief faster than the typical bank could. We foreclosed on the property and took it back as an REO. We are attempting to work out a cash for keys arrangement with the previous owner.

Our immediate goal is to return the original investment back to our investors as soon as possible and we’re happy that we’ll be able to do that very soon. Once we pay that and the preferred returns that have accrued, we will get to share in the profits, which will make everyone happy!

Sean and I had a great time at the New York MBA conference in mid-May. It had a smaller turn out than in previous years but we made the most out of the trip by strengthening our existing relationships with trading partners and fellow investors. We’ll be attending the IMN conference in Dana Point next week and look forward to meeting up with some of the same people as well as others who didn’t make it to the MBA conference.

Coastline Capital Fund III Coming Soon!

Coastline Capital Fund II is up and running and doing extremely well. All of our assets are well underway to liquidation.

Of the five notes that Coastline Capital Fund II owns, our note in Durham, NC, has already gone to trustee sale. There have been two upset bids and the Redemption period will end soon. That means that we should get proceeds within about a month.

Our note in Chula Vista, CA, is going to trustee sale today and we expect it to sell to a third party. If it does not, it will be quick to sell as an REO as the market in San Diego has low inventory and high demand.

Our note in New Bern, NC, has a sale date of mid-May and that will resolve itself within the next month or two.

The last two notes have longer timelines and we can expect that they will go to sale by the end of the summer. We are very pleased with the notes that we've been able to select because they are all on quick time lines and will allow us to pay back our investors’ initial capital within about 7 months of them putting in their initial contributions.

Once Coastline Capital Fund II was doing well, we made plans for opening up Coastline Capital Fund III. We are about halfway through with getting the private placement offering completed, an internet website portal setup, and getting the bank accounts and entities of the Fund set up. We anticipate that it will be completed by June 1st.

Coastline Capital Fund III will be similar to Coastline Capital Fund II in that it will be a straight liquidation model with a preferred return and profit sharing with the investor. More details to follow once we get close to opening the Fund.

Sean and I are heading to MBA’s National Secondary Market Conference & Expo in New York, NY, where we are looking forward to seeing our friends, colleagues, and trading partners in the industry. It's looking to be an exciting month for us and our investors!

Coastline Capital Fund Management Joins the Internet!

Welcome to the first post of many for Coastline Capital Fund Managment! In late 2015, Sean and I decided to take our note investing to the next level. At the time, we were joint venturing on a few notes together and I was working a full time "day job." Sean owned other notes of his own, had other joint venture partners, and brokered notes for other investors.

We wanted to be like the big boys on Wall Street that we traded with. We decided that we would do what they did: raise capital and buy notes in bulk instead of in the ones and twos that we were doing. We realized that there would be a lot of challenges along the way. Getting a Fund up and running isn't easy and we'd have to pay the bills to put food on the table along the way.

We engaged with an attorney that specialized in setting up Private Placement Memorandums ("PPM's") and spent several months getting the first one set up to our liking. It was open to Accredited and Non-Accredited investors and offered a preferred return and share of the profits upon liquidation of the notes.

Coastline Capital Fund II was open to investors from mid-2017 and closed on December 31st, 2018. Although Sean and I have lots of deals under our belts, they are all joint ventures and one-offs. We could show investors our accomplishments as individual deals but it wasn't the same and wouldn't have the impact to potential investors as a bona fide investment fund. We closed Fund II to investors and got down to the business of running a Fund, a small one, but a Fund nonetheless, with an opportunity to show everyone what we could do.

During this process, we've been able to test different servicers, trustee services, foreclosing attorneys, and a host of other vendors to see which ones were the best to work with. We've been able to streamline our processes and build up our asset management platform to handle a far greater amount of assets than we currently have. We have all the pieces in place except we've run out of money to buy more notes. We believe that our successes with this Fund and reaching out to the investing community through this blog, website, word of mouth, and our network will lead to a stellar 2018!