Real estate investing is not a one-trick pony game
Ignite Funding, a hard money lender, experienced zero default in 2020, a pitfall that 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 players in the lending industry were not spared.
Ignite Funding attributes this success to its lending philosophy and the various steps it takes to mitigate the company’s overall exposure to risk.
Risk mitigation is extremely important as Ignite Funding’s sole operation is to provide thousands of investors with the opportunity to participate in real estate investments through trust deeds.
The philosophy “one size fits all that does not suit everyone”
Ignite Funding does not follow a “one size fits all” approach to lending. This flexibility allows Ignite Funding to work with proven developers with varying expertise and product type.
In other words, Ignite Funding is not putting all of its eggs in one basket by only lending on one type of real estate developed in a specific region. This allows Ignite Funding to stay ahead of real estate trends and maintain a diversified portfolio which has been essential during market fluctuations.
“We understand the importance of not limiting our funding and being nimble in an ever-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 bringing them to market at the right time. This includes that the borrower has the ability to recreate and evolve with the market as needed. “
Ignite Funding generally lends in the western United States, but is open to working with bankable borrowers in non-judicial states with a long history in the region and a reliable track record. Ignite Funding lends primarily on the acquisition and development / horizontal and vertical rehabilitation of residential and commercial projects.
For example, investors have the opportunity to invest in projects ranging from the rehabilitation of the Huntridge Theater in downtown Las Vegas to the conversion of apartments in Sierra Vista Arizona to the conversion of shopping malls to style centers. living on the outskirts of Boise, Idaho.
This level of diversification allows investors to optimize and mitigate the risks within their individual real estate investment portfolios.
The philosophy of “ready-to-clean”
While Ignite Funding leaves the door open to new opportunities, that doesn’t mean they agree to fund every project that comes up.
“Only about 10 percent of the loans that go through the pipeline are approved for financing,” Vassar said. “This applies not only to borrowers who may be new to Ignite Funding, but also to regular borrowers.”
This is due to Ignite Funding’s ‘loan-to-possibility’ philosophy, which means that while the underwriting process includes a thorough review of the borrower to ensure that it is a financially sound business, the focus is on respective ownership and borrower ownership. planned exit strategy.
“Even the best borrower is only good until it isn’t. Ultimately your primary source of recourse will be the property that you are foreclosing and whether you are able to execute the sale of the property as intended, ”said Vassar.
2020 performance highlights
Ignite Funding prides itself on its ability to continuously support the success of its borrowers and, in turn, to provide quality investments to its investors.
At the end of December 2020, Ignite Funding had $ 175 million in loans under management and paid out $ 14.3 million in interest income to investors.
To date, Ignite Funding has facilitated 1,376 funded real estate investments with $ 907 million in investor capital, providing 51 borrowers in 16 states with the opportunity to acquire and develop over 12,000 acres of land, 8,100 lots residential and 3.5 million square feet of commercial space. .
Visit ignitefunding.com to view Ignite Funding’s annual performance since its inception in 2011.