Real estate investing is not a one-trick pony game
Ignite Funding, a hard money lender, had no defaults in 2020, a trap many lenders and real estate developers were unable to avoid due to the global pandemic. Ignite Funding did not take this achievement lightly, knowing that many in the lending industry have not been left unscathed.
Ignite Funding attributes this success to their lending philosophy and the various steps they take to reduce the company’s overall risk.
Risk mitigation is extremely important as Ignite Funding’s only business is to provide thousands of investors the opportunity to participate in real estate investments through trusts.
The “one-size-doesn’t-fit-everything” philosophy
Ignite Funding does not adhere to a “one-size-fits-all” approach to lending. This flexibility enables Ignite Funding to work with proven developers with different expertise and product types.
In other words, Ignite Funding doesn’t put all of its eggs in one basket by just giving away one type of property developed in a particular region. This enables Ignite Funding to stay ahead of real estate trends and maintain a diverse portfolio that has been essential during market fluctuations.
“We understand the importance of not constraining our financing and being agile in a constantly changing real estate market,” said Pat Vassar, director of underwriting at Ignite Funding.
“Our success is based on identifying borrowers who recognize a need for real estate products and bring it to market at the right time. This means that the borrower has the opportunity to create himself anew and, if necessary, to develop with the market. “
Ignite Funding typically lends in the western US, but is open to working with bankable borrowers in extrajudicial states with a long history in the region and a reliable track record. Ignite Funding primarily provides loans for the purchase and horizontal and vertical development / refurbishment of residential and commercial projects.
For example, investors have the option to invest in projects ranging from redeveloping the Huntridge Theater in downtown Las Vegas to housing remodeling in Sierra Vista, Arizona, to converting shopping malls into lifestyle centers on the outskirts of Boise, Idaho .
This diversification enables investors to optimize and reduce the risk within their individual real estate investment portfolios.
The “loan-to-own” philosophy
While Ignite Funding opens the door to new opportunities, it doesn’t mean they agree to fund every project that comes in.
“Only about 10 percent of the credit that comes in through the pipeline will be approved for funding,” Vassar said. “This applies not only to borrowers who may be new to Ignite Funding, but also to recurring borrowers.”
This is due to Ignite Funding’s “loan-to-own” philosophy, which means that while the borrower is thoroughly checked for financial soundness as part of the underwriting process, the main focus is on the property in question and the intended borrower Exit strategy.
“Even the best borrower is only good until he is no longer good. At the end of the day, your main source of recourse will be the property that you are foreclosed through the foreclosure sale and when you are able to proceed with the sale of the property as intended, ”Vassar said.
Performance highlights 2020
Ignite Funding prides itself on its ability to continually support the success of its borrowers and, in turn, offer high quality investments to its investors.
At the end of December 2020, Ignite Funding was managing $ 175 million in loans and paying out $ 14.3 million in interest income to investors.
To date, Ignite Funding has enabled 1,376 real estate investments, funded by $ 907 million in investor capital, and has offered 51 borrowers in 16 states the opportunity to purchase and extend more than 12,000 acres of land, 8,100 residential lots, and 3.5 million square feet of commercial space develop develop.
Visit ignitefunding.com to review Ignite Funding’s annual track record since its inception in 2011.