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.

  • Use electronic document signing through eSign Genie.

  • 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. (We are 60-90 days out from having the capability of investors  to ACH transfer their investment to us.)

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

To learn more about this opportunity, visit:

https://coastlinecapitalfm.evesttech.net

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.