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3 min read

Like so many of you, we have spent the last several days and weeks closely monitoring the impact COVID-19 is having on our communities, the markets, and the world. Our hearts and thoughts go out to the people who have been affected by this unprecedented event and we appreciate all those on the front line working to contain the Corona virus. We are carefully analyzing and working to mitigate the risks to our Fund, our business and the sharp team at Aloha who work hard to produce outstanding results for our valued investors. 

We Are Open for Business Aloha Capital is open, operational and well capitalized to finance our borrowers’ current and future real estate investments. Our team is doing its part to help “flatten the curve” by working from home and is mastering the art of zoom meetings and instant chats. We are confident in our team’s ability to deliver our fix and flip, bridge and long-term loan products. Aloha has updated its lending guidelines to reflect the current reality. These reasonable measures include lowering loan-to-value ratios and requiring increased liquidity reserves from borrowers. 

Aloha LTD Income Fund finished 2019 with another solid month and year. It has generated, positive returns for sixty months running, along with providing income distributions. 2020 pushes forward the winning streak, through February. Our goal this year is to again perform on the trendline of the past few years and to keep cranking out positive months and high yield! We work diligently to control the risks within our power and purview.  

We are Well Capitalized Aloha is well situated, with solid financial counter-parties. Our bank provides Aloha a warehouse line of credit that facilitates optimizing the lending portfolio. We’ve been working to improve our deal with them over the past quarter, with incremental success. This process continues through the recent Coronavirus news. 

Further, our largest institutional note buying capital partner has expressed that they are open for business. They are well capitalized, and despite the current bond market volatility, their most recent securitization of short-term loans to real estate investors, had strong demand from the buy side. Institutional investors and bond market participants are still bullish on the US residential housing market in terms of safety and returns. 

The US Housing Market is a Safe and Desirable Market Sector Although the coming weeks hold plenty of uncertainty, we strongly believe in the strength and stability of the US housing market in the medium and long-term. When crises arise, capital markets tend to get highly volatile and correct. This time is no different. To be frank, the recent headlines and action in stocks remind us of what we don’t miss about the world of equities trading. More importantly, though, it reminds us of what we really love about real estate and private lending. We think the asset class we lend on is one of the best in the world. There are long term economic tailwinds supporting investment in the US housing market, these include a critical shortage of current inventory and new construction not keeping pace with demand. Our borrowers, and your investment in our fund, help to address these economic concerns. Since Coronavirus news began reaching critical mass, we are seeing increased interest from market participants. As discussed previously, the bond market is exhibiting strong demand and internet searches geared toward owning US residential rental properties spiked dramatically, much of which came from overseas. 

One more thing to note about your investment in the Aloha LTD Fund. The diversified pool of loans is backed by first position mortgages with personal guarantees. When a borrower defaults, we are in a secured position, with good legal standing. Aloha has been able to, on average, make a positive return on the defaulted loans we have resolved, via foreclosure or otherwise, over the past five years. 

We are grateful for your business and look forward to continuing to offer you a stable investment alternative, now and into the future.

Kevin Hill
Kevin Hill