CALCAP Financial, a hard-money lender based in Southern California, aims to double its loan volume in 2011.
The company's 2010 production wasn't all that large to begin with, but it is finding that more institutional investors are willing to listen to pitches about funding hard-money loans backed by real estate.
"We did 20 loans last year, with most of that coming in the second half," said CALCAP's founder and managing principal, Edward Aloe. "We hope to double that easily this year."
The average loan-to-value ratio of a CALCAP loan is 50% and its borrowers pay interest rates between 9% and 14%. The FICO scores of its borrowers is north of 700. "There's still a credit crunch out there," Aloe said.
The company uses private investors (mostly wealthy individuals) to fund its production. The loans turn over every three to six months. Often, the borrowers are buying homes to fix them up for resale and cannot easily obtain credit from banks.
