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John Haltmaier | Managing Director
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(973) 699-7995
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Overview
Revolve Capital is seeking $25 million of capital to acquire pools of qualified loans/mortgages that management believes are priced well below the real estate value or total collectible balance (whichever is lower)
Direct acquisition, management, and sale of first lien distressed non-performing and re-performing mortgages secured by residential real estate
Over the past decade, the management team has successfully managed over $1 billion of non-performing loans (NPLs). Over the last 24 months, Revolve Capital and its principals have acquired over 1,000 assets at favorable prices
With access to NPLs direct from banks, government agencies, real estate funds and financial institutions, the management team has proven their ability to acquire NPLs opportunistically
Deep ties to institutional sellers of NPLs – prime position to acquire, manage and liquidate anticipated NPL flow coming to market in 2023 and beyond
Opportunity
Borrowers three or more payments past due on their mortgage are up 55% over pre-pandemic levels
Approximately 400,000 serious delinquencies today (were 640,000 remaining before the pandemic)
The forbearance moratorium has expired, and the real estate market and economy are severely challenged
Top Tier 1 banks are currently managing thousands of performing portfolios that Revolve expects to go into default and be sold
Default loan counts and associated costs of managing these assets are proving to be overwhelming for banks, with lack of bandwidth to address these issues
Solution/ Strategy
Revolve Capital plans to capitalize by leveraging its relationships with Wall Street firms and main street investors to programmatically purchase and sell delinquent 1st lien mortgages secured by residential real estate
LOAN SALES
Selling loans that can’t be modified or quickly foreclosed on to region-specific retail buyers at a margin over the wholesale price. Based on the desire for high velocity trading the company generally attempts to re-sell non-performing loans at a margin of roughly 20 to 25% over the purchase price within a 120-day period
VALUE-ADD AND RETAIN
Adding value to existing loans through various forms of modification, renegotiation or deed in lieu staging to enable these loans to be retained or sold at a premium
RENTAL OR FIX / FLIP
Hand-selected properties to provide value to eventually rent or re-list and sell at a significant mark-up
Management
Chaz Guinn, Chief Executive Officer and Founder
- Accomplished CEO. Built and developed multiple real estate investment firms and acquired over $1 billion directly from Tier 1 banks, investment banks, large real estate funds, GSE’s, and servicers while functioning as a market-maker in bringing institutional and Wall Street investments to Main Street investors
- Has structured, negotiated and raised over $250 million from high-net-worth accredited investors, family offices, and financial institutions
Robert (Bob) Repass, Chief Operating Officer
- a 30–year industry veteran and holds deep experience in the distressed mortgage marketplace
- Over the course of his career, he has overseen the purchase, management, and sale of over 40,000 performing and non-performing mortgage loans totaling over $2.5B in market value, giving him an unparalleled track record in the industry
Ray Schalk, Managing Director
- Over 25 years in the performing and non-performing asset industry
- Expertise in analytics, valuation and risk analysis of fixed income assets, including residential, commercial and consumer loans, loan originations and underwriting, exit pricing strategies, conforming and specialized servicing, and capital markets operations
Angie Repass, Transaction Coordinator
- Manages and coordinates the administrative aspects of each of the firm’s transactions to ensure a smooth and efficient process from the time an offer is accepted until the closing of the deal
- Collaborates with various service providers, including title companies, loan servicers, collateral custodians, property preservation companies, and appraisers to ensure their services align with the transaction timeline
Specific Risks
- Collateral Risks: Management will primarily be relying on the value of its interest in underlying real property as collateral for its investment. The value of the underlying property may be affected by numerous factors and risks, including changes in general or local economic conditions, geographic or neighborhood values, interest rates, real estate tax rates, assessments, easements, acts of God, war, terrorism, or other factors which are beyond the control of management
- Credit Risks: While loans and most other assets purchased or originated will generally be collateralized, there will be exposure to losses resulting from default. Therefore, the value of the underlying collateral, the creditworthiness of the borrower or other counterparty and the priority of the lien are each of great importance
- Fraud Risks: Of paramount concern in purchasing or originating loans and other assets is the possibility of material misrepresentation or omission on the part of a counterparty. Such inaccuracy or incompleteness may adversely affect the valuation of the collateral underlying the loans or other asset, or may adversely affect the ability of management to perfect or effectuate a lien on the collateral securing the loan or other assets. Management relies upon the accuracy and completeness of representations made by borrowers or other counterparties, but cannot guarantee that such representations are accurate or complete
- Risks Of Borrowing: If indebtedness is incurred, a portion of cash flow will be dedicated to the payment of principal and interest on such indebtedness. Typical loan agreements also might contain restrictive covenants which may impair the operating flexibility. Such loan agreements would also provide for default under certain circumstances, such as failure to meet certain financial covenants
- Private securities are speculative, illiquid, and carry a high degree of risk – including the loss of the entire investment.