TaliMar Financial I April 2021 Investor Update

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Hi, Brock VandenBerg with TaliMar Financial, your trust deed investment and mortgage fund advisor. As we head into the middle of May, I am excited to announce several more accomplishments. The first, is that we have reached 10 investors committing over $1 million in the mortgage fund. Second, we have increased the number of loans funded in the mortgage fund to 4. Third, and maybe the biggest accomplishment, I am excited to announce as of the end of April we have no 30+ day lates and no loan defaults.

April was another record month in terms of closings. We funded 7 loans totaling over $4.2 million. Those loans ranged from Fix and Flip loans to Bridge loans with a 65% average loan to value ratio. Currently we have 32 loans in the pipeline with an aggregate balance of over $20 million. Our goal this month is to exceed $5 million in total closings.

At the end of April, our loan portfolio consisted of over 87 loans with an aggregate balance of $43 million. That is approximately a $3 million decline from the beginning of the month. We experienced a heavy pay down of fix and flip loans and two large bridge loans. As mentioned earlier, all loans in our portfolio were paying current and with no defaults.

Currently the biggest hurdle is the amount of capital flooding into the market. Borrowers are receiving multiple offers for their hard money loan requests, pushing down rates and increasing loan to value ratios. Additionally, we are seeing the non-qm, or non-qualified mortgage, market coming back strong. Non QM simply means loans that do not meet the general underwriting guidelines of Fannie, Freddie, or FHA and therefore are sold to private investors generally through a securitization. Non-qm lenders target similar borrowers but offer significantly lower rates. The downside is that they are slow to close and they are very narrow in the types of loans they fund.

Our primary focus moving forward is to continue to identify good lending opportunities in strong core markets with either repeat clients or borrowers that can demonstrate the ability to pay and have a clear exit strategy to pay off. We remain focused on building our footprint in the southern California market and generally San Diego.

The number of meetings we have had over the last two weeks regarding the mortgage fund has definitely exceeded my expectations. The biggest takeaway that I have had from the meetings thus far was the frustration investors have had subscribing to loans and the “idle time” between trust deed investments, which is partly the reason why we established the mortgage fund. Unlike individual trust deeds, the mortgage fund will be invested in a portfolio of mortgages. When one loan pays off, investors will continue to earn income on their investment from the interest paid on the other loans even as we replace the paid off loan with a new loan.

The biggest push back we have heard about the fund is the 12-month lock period. We established the 12-month lock period to simply match the average term of a loan we fund. The purpose of the lock up period is to ensure shareholders are committed to the mortgage fund and not simply looking for an investment to park capital for a couple of months.

Another piece of news, our team is growing. I am excited to announce Joseph Nguyen came onboard as a Jr. Loan Analyst. Joseph is a recent graduate of UCSD with a major in Economics. He will be assisting our team in underwriting new loan requests and play an important role with our growth into the future.

In conclusion, I am excited about the current status of the company and what the future has to hold. Not only do we continue to experience a record volume in loan requests, but our current loan portfolio is strong. The launch of the mortgage fund has gone better than expected with plenty of meetings over zoom.

If you don’t currently invest through TaliMar Financial and interested in learning more about our trust deed platform or investing in the mortgage fund, please feel free to reach out to me. I appreciate your time and look forward to hearing from you.

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