Investors | 4 CORNERS CAPITAL

Investing Overview

Since we started in 2015, we have been able to deliver consistent returns to our investors while limiting downside risk with a carefully crafted lending philosophy.

LENDING STRATEGY

We target 10%+ annualized returns for investors with a limited risk profile driven by 5 key lending principles:

Lien Position

We require that our loan be in the 1st lien position for each project. This ensures that our LTV isn't compromised by additional liens.

Loan-to-Value

Our average ~50% LTV across our loan portfolio and a max LTV of 70%. This gives us sufficient margin in the event of a foreclosure.

Personal Guarantee

Our borrowers are required to take on personal liability for loan payments giving us recourse should we need to recoup our capital.

Lending Location

Location is one of the primary reasons we turn down new loans. We avoid lending in judicial foreclosure states to minimize risk.

Skin in the Game

We require all borrowers to come with a meaningful amount of their own money - skin in the game - to align our incentives.

BALANCED PORTFOLIO

We keep a diversified portfolio of loans to spread risk across multiple asset types.

Flips

Land

Construction

Bridge

Comm.

INVESTOR RETURNS EXAMPLE

If you invest $250K today, based on our average investor return of 11% over the last 10 years, you will be projected to:

Receive $275K in income because you chose to collect your quarterly distributions.
Automatically reinvest your distributions compounding quarterly, resulting in $490K in income generated, amassing your total investment to $740K.

RISK MANAGEMENT APPROACH

When borrowers stop making payments

Our loan servicing team stays on top of every borrower and payment made to the fund. We actively communicate with borrowers monthly and continue to inform them should they fall behind. If someone becomes 60 days late and has no intention of making payments, we will start the foreclosure process.

We are passionate about maintaining productive relationships with all of our borrowers and will work to avoid foreclosure if at all possible. When we do foreclose on a borrower, we move quickly to ensure we recoup our investment plus interest as efficiently as possible.

Market correction

Housing market downturns will need to be very significant to start affecting the fund. Even in today’s uneasy climate we still have not had any foreclosures related to market conditions.

Positioning for a correction: given we start the foreclosure process when borrowers are ~60 days late, we can quickly respond to meaningful downturns as necessary.

Since our loans have at least 30-50% margin, we would have to see 2008 foreclosure levels to observe true risk portfolio-wide.

In a scenario where we have mass foreclosures of loans happen simultaneously, and the market experiences a 30%+ drop in value, we’ll move into survival mode.

Survival Mode

Our main goal with this strategy is to preserve investor principle, so ideally we don’t sell properties for a net loss.

In this scenario we’ll look to rent foreclosed properties and distribute net operating income to investors.

Once housing prices correct, we then sell the properties for a profit and ride the housing market back up.

Note: in the event of an economic downturn that drastically affects the real estate market. Each regional area will be affected differently. For example, since 1988 Tucson, AZ, where we do most of our loans, has never seen more than a 12.91% dip in home values over a calendar year. Additionally, the worst it’s seen in consecutive years is 24%, during the housing crisis (2008 & 2009). Over that same time period the S&P 500 fell by over 50%.