A new mortgage income fund has been launched with a target of $50 million in capital commitments to address California’s unique housing and lending gap.
Media release: New fund taps into generational investment opportunity in California property
Read the announcement at AP News, California Newswire and The Bakersfield Californian.
Central Mortgage Income Fund (Central) has been founded by Bay Area property veterans Dan and Ben Dianda to invest in short-term, real estate-backed loans across California.
With a significant undersupply in housing (80,000 houses built annually, 180,000 needed), ageing properties (average home is nearly 50 years old), and the growth of private lending (CA lending market valued at $16.6B, growing 25-31% annually), Central aims to fuel property flippers and developers with easy access to the capital needed to meet demand.
“The convergence of enduring housing demand, a severe shortage of traditional lending, and high yield potential from asset-secured loans makes California-focused private credit an unprecedented opportunity right now,” Central CEO Ben Dianda said.
“The housing challenge in California is well documented, and we need to provide flippers, developers and entrepreneurs with the fuel they need to build more, and build fast.
“The creation of Central will make raising and deploying capital for this purpose easier and more efficient.”
Mr Dianda said opening up access to funding is crucial in a California property ecosystem where everyone has the potential to win.
“In an ideal world, fund investors support developers and make healthy returns while doing so, developers create value and profit by building and upgrading housing, while more quality housing becomes available for Californian residents,” he said.
“Private lending has a key role to play to maintain the flow of capital that keeps the ecosystem moving, flowing and growing.”
Mr Dianda has plans to deploy funds across the state, with initial strategies to target the San Francisco Bay Area, Los Angeles, Riverside and San Bernardino counties.
The fund is supported by the Dianda-backed origination and servicing firm Equidy, which has so far paid out $110 million in funding with no loss to investors.
Central is aiming to raise $50 million from family offices, high net worth and institutional investors, who can expect an 8 percent annual yield paid monthly, outperforming Public REITs (5-year average 7%) and US Treasuries.
Downside is also protected through conservative underwriting and diversification with pooled loan exposure.
For more information and interview requests, contact Central media manager Andrew Montesi at media@central.io
