Secured Income Group and Covid-19

It is our goal to provide insight into the environment where conditions are changing due to COVID-19, and we arrive at a “new normal”.

We as a company are considered an essential financial service and are taking the necessary precautions to protect ourselves and our work environment. In doing so, we are able to efficiently operate and manage our loan portfolio and investments while remaining in daily contact with our investors.

The strength of our portfolio and more than 23 years of experience are uniquely poised to be flexible in all types of market conditions. Whether in strong or distressed markets, our large equity position and the short term nature of our loans (paid off in 9-12 months) give us the agility and flexibility that other larger lenders simply do not retain. In addition, our loans revolve around entry-level housing product, which has the largest pool of natural buyers and has the most aggressive take-out financing.

To recap our current portfolio position:
Current Portfolio Size: Less than $75 million, with 90% due and payable in less than 12 months. We are relatively small in comparison to other large lenders with $200mm to $300mm million under management, or more.

Current Portfolio Operations: In-house underwriting, property evaluation, document preparation, and funding, as well as our own escrow company, ensure we are able to not rely on outside sources to maintain a steady workflow without interruption due to temporary closures.

Current Portfolio Performance: We have seen no uptick in foreclosures and our delinquency rate is less than 1%. We fund an average of 5-10 of the best loan requests that meet our underwriting guidelines from the over 60 loan requests we receive every month. We are continuing to see healthy demand for properties simply because inventory is so low and rates are at all-time lows.

Current Portfolio Liquidity: We had record profits from 2019 and substantial loan payoffs in the first quarter, leaving us with healthy liquidity. We also have access to investors who are able to purchase loans on a very short term basis if needed.

Current Portfolio Equity Position: Our current average equity position on each loan is 30-35%, with most construction loans at 40-45%. Moving forward, our minimum equity requirement will be 40% and will be adjusted as needed with market movement. We envision our profits going up this year as we’re able to charge more for our loans vs. last year.

We will endure through good and bad markets, and know that “this too shall pass” as the vaccines become available to the public.
We remain committed to providing the best in service, market and portfolio updates, and wish you and yours the best of health.

Max McDermott