Capital Spotlight – Highlighting featured capital investors. We regularly publish the detailed criteria of our most unique real estate capital sources.
For seasoned real estate sponsors, the journey towards successful investments often includes addressing critical equity needs. This may involve navigating capital calls while avoiding dilution or ensuring the availability of sufficient equity capital for cash-in refinancing and new acquisitions. Our featured capital source caters to sponsors with existing cash-flowing real estate assets as well as property management contracts. The investor offers investment checks ranging from $100K to $2MM per entity and can increase the total investment amount by aggregating multiple entities in a sponsor’s portfolio.
In the face of rising interest rates and the complexities of closing real estate transactions, Valencia Realty Capital addresses the common challenge of unexpected capital shortfalls – whether due to reduced loan amounts or lost equity partners – by partnering with a private capital source that excels in quickly bridging financial gaps. The investor is a specialty credit fund headed by an entrepreneurial real estate operator and specializes in structuring preferred equity investments or cash flow assignment agreements that do not encumber property with a lien. They offer the unique capability to close transactions within as little as 7 days, while ensuring sponsors retain their equity ownership.
|Cash Flow Assignment or Preferred Equity
|Across the US and its territories, for US-based entities
|Entity / Asset Types
|Stabilized entities with regular cash flows that own properties directly, or as an equity partner in properties, such as Multifamily, SFR Portfolios, Hospitality, Self-Storage, Retail, Industrial, Short-term Rentals, Assisted Living, and Student Housing. Additionally, cash flows from contracted asset and property management entities are considered.
|Use of Funds
|Flexible, including property acquisition, cash-in refinancing, construction, land development, and capex.
|Up to 22 times the monthly net cash flow per LLC/entity.
|Minimum of 3 years in commercial real estate, US-based business entity, and 12+ months of stabilized cash flow (verified by historical P&L’s)
|Ranging from 1 to 5 years
|$100K – $2MM per LLC, with potential for higher amounts in select cases.
|Rate / Returns
|Between 13% – 16%, depending on term.
|Fully amortizing over the term, with interest-only payments available for up to 12 months.
|Personal guarantee and lien on the entity (not the property).
|Following a 6-month lockout period prepayment may be made subject to a buyback schedule
|Preferred equity units, unsecured or UCC filings.
|Closing Time Frame
|5-14 days to close. (For check sizes $500K or less, closings can be 7 days or less. Greater than $500K closings can take 2-3 weeks).
Typically, 5-14 days. Expedited 7-day closings for checks under $500K. $500K+ checks can take 2-3 weeks.
|Required Information for a Quote
|Schedule of Real Estate Owned & Trailing 12-month P&L for the targeted entities.
|1-3 days for a verified quote, followed by a concise due diligence process, culminating in investment approval within 1-2 days post-receipt of all due diligence items.
If this capital source may be of interest, book a call to discuss a potential capital arrangement.
Read our last Capital Spotlight: Tech Co-Founder-Backed Family Office Providing $1MM to $7MM “Soft Pref” Equity Checks for Value-Add Multifamily