Education: How do you weigh up private real estate debt investments?

Leaving no stone unturned: How do we evaluate loans?

Anyone looking to make an investment knows the value of due diligence. It’s a safeguard that helps you make an informed decision and minimise the risk of loss down the track. At AltX, our extensive due diligence on all deals ensures we only offer quality investment opportunities to investors. 

 

Ticking the boxes – and then some

Before we offer a loan to investors, we apply our rigorous assessment criteria to determine the quality of the underlying borrower and the security being offered. Generally, all privately funded deals must tick these boxes:

  • The borrower: Must be a company. If not a company, the loan must be primarily for business purposes. We also assess the borrower’s background and financial history so we can get a 360-degree view of the applicant.
  • The security: The loan must be backed by property security. This can be residential, commercial, industrial or land. We examine the quality, value, and liquidity of the property/ies being used as security.
  • Income verification: The borrower must have the income to pay the interest owing.
  • The exit: The borrower must be able to demonstrate how they will repay the loan. This is normally done via a refinance, sale or other cash injection.

 

The value of valuations

For short-to-medium-term lenders like us, valuations are incredibly important. We have less ‘buffer’ than banks, which can lend over a 30-year timeframe and are unlikely to run into repayment issues in the short term.

But we do more than just take a valuation at face value. We make sure we get a 360-degree view of an asset before we enter a deal. Our internal valuation team assesses and, if needed, challenges independent valuation reports. They talk to real estate agents, go on-site visits, and look at current properties on the market. They also look through council records, consider zoning and location, and the development potential of every property. Only when all these steps are taken do we move to the final stage of offering the deal to investors.

At AltX, we make sure we get a 360-degree view of an asset before we enter a deal…AltX Property Research Analyst Chris Mears

 

We go the extra mile

If you’re a wholesale investor looking for a consistent, attractive yield to grow your wealth, AltX’s platform lets you access quality, 1st mortgage investment opportunities. Each deal offered is reviewed and vetted by our experienced deal team, applying our rigorous credit assessment and underwriting processes to ensure we only fund and offer the right deals to our investors.

To learn more about real estate debt and how to unlock alternative investment opportunities with AltX, visit www.altx.com.au/investments

 

Contact Us

Level 21, 10 Grafton Street
Bondi Junction, NSW, 2022

Phone: 1300 991 380
Email: marketing@altx.com.au 

 

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