Frequently Asked Questions - Investors
Who are the borrowers?
Anchor's borrowers are experienced businesses or business people that
purchase fixer uppers (rehab properties) well below market value from banks,
other lending institutions, estates, etc. for the express purpose of resale for a
profit. They buy these houses or multiple unit buildings at a substantial
discount, fix them up in a timely fashion and have an excellent marketing program for resale - usually in a time frame of about 8
months. Most of our borrowers obtain loans on a repeated basis - using Anchor as their primary source of real estate related acquisition financing.
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Why does a borrower come to Anchor Mortgage instead of a bank?
Anchor reacts quickly to loan requests and can underwrite and process a loan in a matter of days unlike a bank that often takes between 45-90
days. In addition, the borrower may not be able to obtain a non-owner occupied property loan due
to tightened banking lending policies.
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Where are the properties located?
The properties that secure the investment are located in Southern California. Anchor Loans has evaluated over 10,000 properties in Southern California in its 12 year history and is very experienced in valuing properties in this geographical area.
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What types of investment products can an investor purchase?
Investors can invest in Whole Loans and/or an interests in Anchor's Real Estate Mortgage Investment Fund (Anchor Fund, LLC) – Please refer to the Investment Products section.
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What is the minimum investment for an investor?
For Whole Loans, the minimum is the dollar amount of the actual loan.
For Anchor Fund, LLC, the minimum investment is $10,000.
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What rate of return does Anchor Loans offer?
Depending on the type investment selected, the current rate of return varies.
Whole Loan Purchases generate yields (net of loan servicing fees) that range from 9.50% - 11.00%.
For Anchor Fund, LLC, the 5 year return was 7.35% and the year-to-date return for 2009 is 2.28%.*
Rate of return is variable and subject to change.
*Past performance does not guaranty future results.
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What LTV (loan-to-value) ratio are the loans offered by Anchor Loans?
Anchor's loans generally do not exceed 65% of the value of the property securing the loan. Frequently, loans are available with loan-to-value (LTV) ratios of 55% or less.
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Who collects the borrower's monthly payments?
Anchor Loans acts as the loan servicing agent on behalf of the investors. This includes collecting the monthly payments and distributing those payments to the investors.
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How do I receive my investment return?
For Whole Loans, the investor receives monthly disbursements of the interest on the loan by either by check, wire or ACH (direct) deposit.
For Anchor Fund, LLC investments, the investor can choose to receive monthly disbursements (with the same choices as for whole loans) or have the income earned reinvested and compounded for growth.
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Will I have access to my investment if I need to make a withdrawal?
For Whole Loan investments, your principle is not available for withdrawal until the loan pays off.
For investments in Anchor Fund, LLC, initially your invested capital may not be withdrawn for a period of 3 months. Thereafter, withdrawals are restricted by cash flow and other limitations set forth in the Fund's Offering Circular.
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Can I invest my IRA or Pension Plan?
IRA, SEP IRA and Pension Plans are accepted.
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How do I apply?
For Whole Loan Investments, call (310) 395-0010, ask for Investor Relations and request a Comprehensive Investor Packet. It will be mailed or e-mailed to you promptly and includes key information including the Investment Application.
Anchor Fund, LLC, shares are offered only through receipt of the Fund's Offering Circular. Call (310) 395-0010 and ask for Investor Relations to request a copy of the Fund's Offering Circular.
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