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.