We welcome you to Pacific Horizon Financial: Home of the “Safety First’s”
Pacific Horizon Financial, Inc. is a private real estate lending company offering attractive first mortgage opportunities to qualified investors. Pacific Horizon has been specializing in the placement of private investor funds since 1989.
Based in beautiful San Diego, California, the company owes much of its success to a veteran, hands-on management team devoted to surpassing your financial expectations. This is achieved by strictly adhering to a business plan founded on honesty, value for our clients, and sole investment in very conservative loan-to-value ratio first mortgages.
Our successes are evident in continual company development, a fund with exponential annual growth, and most importantly a very high level of client satisfaction. At Pacific Horizon we are proud to have provided a 2004 net yield of 11.4% to our investors.
RISK FACTORS
It has been our experience that first mortgages offer much greater security than junior loans. The fund uses conservative loan to value ratios – no greater than 65% of the value of developed property and 50% of raw land – as a hedge against defaults. In those rare instances when there is a default, only property taxes take priority over Pacific Horizon’s lien. Our experience has shown that – because of our low loan-to-value criteria – on those few occasions when a foreclosure has become necessary, the value of the property versus the amount of the outstanding debt has left Pacific Horizon and thus its investors in a very favorable position.
We firmly believe that first mortgages secured by commercial real estate are one of the best investments from a risk/reward perspective available today. Nonetheless, all investments entail some risk, and we won’t hesitate to disclose those to you. Some risks include, but are not limited to:
The National and Regional Economy
Our loans are made to be in first position and to give us a lien on real estate that is worth at least 50% more than the money we lend. If we loan out $2,000,000, then the value of the collateral will be at least $3,000,000. That provides us with a very satisfactory cushion in the event of a default by the borrower. If the value of the collateral was to significantly diminish because of a turndown in the economy and if our borrower was not able to meet his obligations, then it is possible that we would not recover all of our investment in foreclosure.
Earthquake
A severe earthquake could damage our collateral. Earthquake insurance is expensive and does not typically cover enough of the risk. Accordingly, it is not normally required by lenders. If the collateral is subject to damage by earthquake, we could suffer a loss.
Borrower Default
Pacific Horizon is very conscious of the credit of its borrowers and we prefer to avoid poor credit situations. Many of our loans are made to borrowers who can qualify for bank loans but chose not to because of processing speed, property type, or particular condition. Some of our borrowers are younger, just branching out, etc. and may not be strong enough financially to qualify at a bank. We welcome those who we think are of strong moral character and we seek to help them become prosperous. However, if they are not up to the task, we will be forced to foreclose on their property. Barring any protracted legal battle or unforeseen change or defect of the property, we should still recover all of our investment. Yet, an unfavorable confluence of factors could lead to a loss.