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Who We Are Who We Sell ToHIS Capital Funding provides funding for real estate in-

vestors and rehabbers in Southern California and Central Florida, while sister company HIS Capital Group provides management support, extensive resources, and shared infra-structure to promote growth in both markets. 

Our senior management and advisory board possess a combined 110+ years of expertise in real estate law, project development, finance, building and asset management. The knowledge and insights gained through a host of economic cycles has guided our team to acquire in whole or in part, over $500 million in assets across the globe including land, office buildings, flex spaces, multi-unit residential buildings, mobile home parks, industrial parks, distressed residential properties, and now, business purpose lending.

As investors ourselves we are aware flipping homes will likely become more favorable in 2014 as home prices are ex-pected to rise. HIS Capital Funding serves as an alternative funding solution for investors exclusively in California and Florida. Competitive, flexible terms along with a stream-lined lending process affords our clientele the opportunity to avoid the traditional lending delays and complete more transactions in less time.

HIS Capital Funding offers business purpose loans for experienced investors, seeking to leverage their capital and maximize their purchase power. In addition to our niche market, we serve as a conduit for real estate agents, brokers, developers, title companies & other industry professionals seeking to offer additional value to their clientele.

Nationally there is a high demand for capital from those trying to strike a balance between the demands for afford-able housing and the lack of inventory that meets housing standards. More specifically, we are positioned within con-trasting markets. As an example, Q3 2013 California tallied over 32,000 residential flips, 2100 of them with a loan bal-ance average of $409K in L.A. County alone. The market is competitive and demand continues to grow as opportunities remain abundant. However, in Florida due to the lack of adequate funding options, only 2,417 residential flips with an average loan amount of $100K were completed. Housing supply is ample while demand for funding across the state is at record levels.

We believe it is critical to maintain a local presence, and in doing so we are firmly entrenched and able to capitalize on this unique window of opportunity at a more efficient and profitable rate over competitors.

Note: This does not constitute as an offer to sell and or solicitation of an offer to buy securities.

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Critical to our success are the tools and resources we offer both our investors and borrowers. These tools set us apart from the competitors and enhance our credibility because of the transparency they provide to our clients.

The Project Management Software allows us to have full control of the files, messages, tasks, mile-stones and team members all in one place. With the click of a mouse, we are able to see quick over-view of all the current projects and loans keeping us up to date with recent activity in all transaction.

”Having an experienced team using the right technology can make the investment process seamless.

Project Management Software

“All of our borrowers use this software to maintain

live records of all the project communication. The ben-efits to the developers are increased efficiency, produc-tivity and profitability.

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Underwriting

HIS Capital Funding’s underwriting criteria allows minimized risk while remaining competitive with similar products in the market place. Our flexible loan terms, strong marketing strategy and competitive pric-ing has solidified our position as market leaders within the residential development market.

HIS Capital Funding originates business purpose loans to experience real estate developers. The purpose of the loan is to serve as a bridge for developers to purchase, rehab and sell residential non-owner occu-pied 1-4 unit properties. Developers must show a solid track record of similar transactions done in the past 12 months in order to prove their ability to perform and complete the projects considered for funding. Loan terms are currently available up to 12 months with a 90 day rehab completion schedule. Extensions will be discussed exclusively on a per project basis.

Hard Money Loans

Lending companies and individuals of affluence provide a specialized asset based funding option to private investors known as Hard Money Loans. HIS Capital Funding provides short term capital to experi-enced real estate developers based on the value of the real estate acting as collateral. Real estate professionals and developers use hard money loans to close on real estate opportunities quickly allowing them to bypass the delays of traditional lending outlets & close more transactions.

Timing is of the essence and closing on a proj-ect quickly is many times more important than the terms of the loan. HIS Capital Funding has the ability to close the loan q uickly and secure the deal for the property buyer.

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Location: Kissimmee, FloridaProperty Summary: 5 Bed 3 Bath 2,341 Sq Ft Built 2001After Repair Value: $185,000.00Purchase Price: $127,000.00Loan Amount: $100,000.00Loan to Value Ratio: 54%Yield: 10%Payment to Investor: $833.34 per monthTerm of Loan: 12 Months

Location: Orlando, FloridaProperty Summary: 3 Bed 2 Bath 1,569 Sq Ft Built 1958After Repair Value: $135,000.00Purchase Price: $64,000.00Loan Amount: $51,200.00Loan to Value Ratio: 37.9%Yield: 10%Payment to Investor: $426.67 per monthTerm of Loan: 12 Month

Location: West Covina, CaliforniaProperty Summary: 3 Bed 2 Bath 1,012+ Sq Ft Built 1953After Repair Value: $400,000.00Purchase Price: $265,000.00Loan Amount: $240,000.00Loan to Value Ratio: 60%Yield: 10%Payment to Investor: $2,000 per monthTerm of Loan: 12 Months

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Due Diligence Protocol

Subject Property:

Property Requirements& Due Diligence Process”

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Due Diligence Protocol

Subject Property:

Preliminary Title Report

Title is verified to see what is owed on the prop-erty and identify if any judgments or tax liens are listed against borrower. The result of this search is called the preliminary title report. This report allows the lender to decide if he wishes to proceed with the new loan based on the taxes, liens and loans. One of the critical items we search are code enforcements. This code enforcement may rep-resent a small repair, or they could become a full demolition order. Every detail must be in order before we offer you a loan opportunity.

Approved Borrowers

Borrowers submit loan applications which include the documents under “borrower require-ments” below. Borrowers do not need to have a property ready to close in order to get approved. We approve them based on their personal infor-mation, employment status, credit report, avail-able cash or lines of credit, experience and overall financial net worth. The borrower gets an approv-al letter so they can begin making offers for the properties they want to purchase. If we feel that the borrower is a risk or too inexperienced with no plan, or does not have enough cash we will turn down the borrower until our concerns are clarified.

Borrower Requirements

◊ 1003◊ borrower authorization and other disclosures◊ Copy of Driver’s license◊ 2 months bank statements◊ Letter of experience◊ Schedule of Real Estate◊ financial net-worth statement◊ W9 Form

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The proper analysis of a project coupled with an effective loan servicing team will always

create a more safe investment environment for a passive investor.

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Target Market & Strategy

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The following outlines key procedure for all Lenders

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Submit Lender Package - All forms must be completed

Lender Approves Loan Proposal – Loan Proposal is uploaded to Project Management Software. Lender reviews documents and approves funding. Loan Proposal Includes:a) Investment Analysisb) Property Appraisal

c) Closing Statementd) Loan Servicing Agreement

Lender monitors activity at any time – using FCI Servicer dashboard.

Lender begins receiving monthly payments – Once the loan is funded and security instruments are recorded, FCI begins collecting payments, processes the checks and disburses your funds to you or your IRA Custodian electronically.

Lender funds loan – Per closing statement, lender wires funding figures to es-crow/title company to fund loan amount.

HIS Capital Funding receives executed documents and uploads to the project management software for lender access. Documents Include:a) Copy of Executed Promissory Noteb) Copy of Recorded Deed of Trust or Mortgage

c) Copy of Title Insurance Policyd) Copy of the Fire Insurance Loss Payee

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Frequently Asked Questions

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If you are ready to take the next step in employ-ing your capital via private lending, below is a simple description of what to expect going forward.

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Lender Package

There are new guidelines that were implemented since 2013 regarding who can invest in trust deeds in California and for mortgages in Florida. In order for you to receive loan opportunities please complete our lender package and fax it back to (877) 447-8007 or by email at info@hiscapitalfunding.com. Visit www.hiscapitalfunding.com or send us an email at info@hiscapitalfunding.com.

The investor package includes the following docu-ments:

1) Investor Questionnaire2) Direct Deposit Instructions3) Form W-94) Understanding of Risk Factors5) Private Lending Acknowledgement Form6) Vesting Indication Form7) Loan Commitment Form

Take the next step. We look for-ward to cultivating a long term business relationship based on trust and performance. For more information call us directly at (877) 452-6569

Note: Not for public distribution. Propriety and Confidential. Not for release without prior written permission

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What is next?

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Contact InformationHeadquarters | California Office2400 E. Katella Suite #1265Anaheim, CA 92806Phone: (877) 452-6569Fax: (877) 447-4507

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Contact Us

Contact InformationFlorida Office

250 N. Orange Ave Suite #610Orlando, FL 32801

Phone: (877) 452-6569Fax: (877) 447-4507

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5) Are you “pooling” my money with other people’s?No. That turns this type of investment into a security and that process goes against the private lending fundamentals. At HIS Capital we believe establishing a realtionship by "walking together" before we run is important before we introduce additional opportunities. We do offer additional types of investments through HIS Real Estate Alliance Fund. Let's begin working on a few deals together before we look into other investment opportunities.

6) Do you require fire insurance on the property?Absolutely, this is yet another way to minimize risk when we structure and qualify the projects for you to fund.

7) There are other companies offering mortgages or deeds at 18%.Well, before you invest your hard earned money, consider the borrower and the collateral. If a borrower is willing to pay 18% we find that typically means their options are extremely limited as cheaper money is available. Be careful when you chase high yields. You may wind up lending to the wrong person, or on the wrong property, or in be placed in an inferior position. It may just not be worth it!

8) How do I know the property is insured?Before we close escrow, our borrower is required to provide proof of fire insurance that is paid from the closing statement. We monitor hazard insurance records to protect against coverage lapse. If the policy expires, we can force insurance coverage if neces-sary. This is paid for by you, the lender, but reimbursed by the owner, usually very quickly or sometimes at the close of the sale of the property.

9) Can I invest if I live in another state?Yes, however, you want to consult with your CPA to discuss how you would pay taxes on interest earned in either Florida or Califor-nia and to identify see if any potential tax credits are available so you don’t have to pay twice.

10)Can I invest if I live in a foreign country?Yes. HIS Capital Funding needs a legal U.S. entity or valid Individual Tax Identification Number as well as a U.S-based address to send interest payments. HIS Capital Funding does not withhold any taxes on behalf of foreign investors. Please consult with tax and legal counsel to ensure all national and international guidelines are properly followed. of foreign investors. Please consult with tax and legal counsel to ensure all national and international guidelines are properly followed.

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1) Why can’t I just find the borrower myself and do my own private loans?In the lend ing world there are many rules and regulations that prevent you from charging high interest rates. If you charge these high rates while making the loan directly to a borrower, you are committing usury, and usury has severe penalties. Read more about it from the Florida and California Office of the Attorney General.

2) What are the benefits of using a HIS Capital Funding?In addition to maintaining compliance with all state & federal regulations, using HIS Capital Funding to maximize your returns provides additional benefits such as:

Documents and Reports: HIS Capital Funding saves you time and money by levering our team of experts to produce the right documents, record security instruments and provide you with the required year-end tax documents.

Sourcing Quality Loans: Our experience will save you time and money by allowing you to be part of our huge network of real estate professionals and active borrowers allowing you to do multiple deals each year.

Save you Stress: HIS Capital Funding saves you time, money and stress as we utilize our resources to screen borrowers and analyzing projects that make sense for you to fund. This allows for a peace of mind with regards to both knowing each borrower has been vetted property and each individual asset has been analyzed in detail.

3) What is my security that my capital will be protected?As a private lender, your security comes first and we do this by minimizing risk in the loans we originate. We work with borrowers that have liquidity and that can afford the monthly payments but that also have the experience to exit and payoff the loans as they complete the renovations of their projects in a timely manner. Our loans are structured with low loan to value ratios and equity in them which becomes the incentive for the developer to complete the project in a timely manner.

4) What if the borrower stops making payments?We structure our loans with a minimum of 30% protective equity. This way, if we need to take a property back in foreclosure, there is plenty of room available to sell the property quickly. This helps you get your principal back, plus interest and any additional fees. We use a third party servicer that would handle all collection calls, negotiations, legal issues, foreclosure processing and coordination at very reasonable fees.

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Investment Process

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As you can see in the chart below, all-cash buyers continue to make up a large percentage of all sales in both California and Florida markets. The number of “cash transactions” has more than doubled since 2007 and as property values continue to increase, we will continue to see an increase in all-cash transactions.

Strategy

HIS Marketing Efforts

Building and maintaining successful strategic alliances with key industry professionals and business-es has been integral to our success. Since 2005 our business has flourished using this simple but proven strategy, and by continuing to add value via the intro-duction of new products and services we have posi-tioned ourselves as market leaders. The development of our publication ROI and successful launch of Elite Business Professionals, (which specializes in hosting executive level networking events), ensures that our Brand remains prevalent in both markets.

Cultivating our existing book of business, Geo

targeted on-line marketing, direct mail and expanding our existing Cable Television marketing efforts will encompasses our efforts and serves as the foundation of our marketing strategy. Creating new relationships through a variety of industry associations, events, and outlets.

The tools we utilize such as those mentioned be-low are some of the many reasons why private inves-tors choose to leverage our knowledge, expertise the effective efforts our firm produces.

This unique value based approach gives us an edge in both locating the quality borrowers that perform consistently and offering our valued investors with consistent, safe and regular repeat business opportu-nities.

CALIFORNIA FLORIDA (RED)

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Project Analysis

As a short-term investor, developers need to quick-ly calculate the profit, budget and investment return of their potential investments. We analyze every project that we originate loans for in order to understand the developers’ goals. The project analysis is used to present the investment opportunity to the lender and it is only prepared once the borrower and the property has been qualified. Our role is to ensure a long term rapport with our borrowers by ensuring they make money, while securing our lender partner’s collateral in the process.

We run investment analysis reports on every loan taking into consideration the after repair value deter-mined by the appraisal / BPO, the cost of the rehab based on the inspection and construction assessment form, loan amount & loan payments. In addition other carrying costs such as utilities, taxes, insurance, clos-ing costs, commissions and many other expenses must be accounted for in order to make every transaction profitable.

Loan Servicing

HIS Capital Funding outsources the foreclosure and debt servicing activities for newly originated loans in Florida and California.

The loan servicer is the 3rd party independent company that processes the borrower payments and disburses interest payments to you every month.

The loan servicer also handles all loan defaults, late notices and foreclosures for our lenders helping them coordinate any legal issues should they arise. Private and institutional investors rely on the use of detailed reports generated by experienced loan servicers that use technology to access information quickly and with detail to promote transparency. HIS maintains a strong relationship with FCI Lender Services, a leading national Private Money loan servicer and one of the nation’s oldest Specialty Servicers.

Founded in 1982 FCI has over $2.6B under man-

agement; all handled one loan at a time. A nationally Rated Servicer (MOR RS2) with a SOC1 (SSAE 16) au-dit assures compliance in all areas for your safety and security. Investors will get the industry’s highest level of servicing transparency with FCI’s 24/7 live Investor Login showing loan activity, cash flow, conversation notes and any collection or foreclosure activity. Inves-tors will have a significant insured independent third party handling their money.

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In order to determine the maximum loan amount we require a copy of the fully executed purchase agree-ment. In the case of the acquisition of a short-sale, lender approval will also be required. In addition, we also require a copy of the escrow instructions and a copy of the preliminary title report.

Cash accommodations can be arranged for experi-enced borrowers that have a strong relationship estab-lished with us.

Appraisals and BPO

HIS Capital Funding hires third party independent licensed and certified local appraisers with the knowl-edge and credentials to produce the level of property value opinions that banks and top lending institutions need to originate quality mortgages. The appraisal is ordered by our processing team but is paid by the bor-rower once the loan is funded.

We also maintain a large network of local brokers that verify the accuracy of our electronic broker price opinions (BPO) to add an additional layer of protection to our evaluation process. Both evaluation methods are used for all originations in order to determine the most accurate loan amount and to mitigate risk.

Home InspectionsAll of our transactions require independent certi-

fied home inspections looking for structural problems that the collateral may indicate specific attention to. These inspections are compared to the construction bid sheets presented by the developers to certify that all repairs will be done to the property in order to ensure marketability of the collateral once it is ready for sale. We require our developers to provide us with a home inspection in order to check for but not limited to the following.

◊ Roof◊ Plumbing◊ Electrical◊ AC and heater systems and components◊ Foundation◊ Health and safety issues.

Property documents

Construction Assessment Forms

Our experience in rehabilitating residential prop-erties allows us to think as our borrowers do. Having a full construction assessment done upfront is crucial for project budgeting and to prepare the right investment analysis. We provide our custom made assessment forms to our borrowers in order to understand the developer’s goal with the property.

We compare the home inspection with the con-struction assessment form to ensure that the proper rehab will take place relative to the value of similar properties highlighted in the appraisal report and BPO.

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Location: Pasadena, CaliforniaProperty Summary: 3 Bed 1 Bath 1,000+ Sq Ft Built 1930After Repair Value: $295,000.00Purchase Price: $180,000.00Loan Amount: $160,000.00Loan to Value Ratio: 54%Yield: 10%Payment to Investor: $1,333.33 per monthTerm of Loan: 12 Months

Location: New Port Richey, FloridaProperty Summary: 3 Bed 1 Bath 1,080 Sq Ft Built 1965After Repair Value: $55,000.00Purchase Price: $31,875.00Loan Amount: $25,500.00Loan to Value Ratio: 46.37%Rental Income: $750.00 per monthYield: 10%Payment to Investor: $265.63 per monthTerm of Loan: 12 Months

Location: Holiday, FloridaProperty Summary: 2 Bed 2 Bath 1,008 Sq Ft Built 1963After Repair Value: $55,000.00Purchase Price: $33,500.00Loan Amount: $26,800.00Loan to Value Ratio: 48.72%Rental Income: $750.00 per monthYield: 10%Payment to Investor: $223.34 per monthTerm of Loan: 12 Months

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Property Criteria

The amount of the loans is calculated based on a percentage of the purchase price or the after repair market value (ARV).

California

◊ (Lower of) 90% purchase price or 65% ARV ◊ Business Purpose Loans◊ Non Owner Occupied◊ 1 to 4 Units◊ Up to 12 to 36 Month Terms (extensions available)◊ Yield of 8-10%

Florida

◊ (Lower of) 80% purchase price or 65% ARV◊ Business Purpose Loans◊ Non Owner Occupied◊ 1 to 4 Units◊ Up to 12 to 36 Month Terms (extensions available)◊ Yield of 8-10%

“ ”The following “Current Project Examples” will illustrate the

implementation of terms provided to our investors.

Project Analysis

We review every project and create an investment analysis that becomes available for our lenders to review. This analysis becomes a very helpful way to get a better understanding of the loans proposed to lenders for funding. The analysis also summarizes but should not substitute the information on the purchase contract, BPO, appraisal, title report and construction assessment form.

Market Reports

Our market reports allow us to understand week-ly trends in the markets that we operate within. We are able to review the most up to date market data in a brief one page report which is provided to our bor-rowers and real estate partners to assist them with the understanding of their local activity.

These reports also complement our online market-ing funnels and sales videos to attract new borrowers and serve as part of an educational product offered to potential borrowers looking to leverage their capital flipping homes.

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Loan servicing is a high quality, structured pro-gram for servicing all types of performing and newly originated Private Money loans.

Standard and Specialty Loan Servicing

◊ Borrower Welcome Letters◊ Borrower Monthly Statement with Payment Coupon ◊ Lender Welcome Letter◊ Lender Monthly Statement of all Account ◊ Same Day Payment Posting ◊ Electronic deposit (ACH) into Lender’s account ◊ Late Notices sent at 11, 21 and 31 days delinquent ◊ Outgoing collection calls after Late Notices ◊ Borrower inquiry calls handled◊ Releases and Reconveyances◊ IRS 1098 and 1099-INT Reporting ◊ 24/7 Account Access

◊ Downloadable Reports◊ Foreclosure Processing And Coordination◊ Lien Verification◊ More

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Private Funding Lending Collateral & Security Instruments

This is not a new investing tactic or strategy. In fact, Private Lending dates back hundreds of years long be-fore all major banks, credit cards and finance compa-nies when individuals borrowed money from others in exchange for interest payments. This loan would often be secured by real estate or other tangible collateral in case of default.

With any private lending investment, you will receive all transaction & collateral details & documen-tation necessary to complete your diligence and there is never any obligation to invest.

The reason why people decide to get involved in private lending is that Mortgage and Deed investments produce predictable monthly interest payments while protecting your principal. Investors looking to diver-sify and grow their portfolio in a volatile stock mar-ket are always searching for new ways to secure their capital with collateralized investments. At the simplest level, lenders have complete control over the trans-actions they fund since they become the bank. With home buyers forced to seek alternative lending sources due to tighter bank lending restrictions, demand for private lenders continues to rise.

All of our private lending investment properties are collateralized by a promissory note and secured by ei-ther mortgage or trust deeds, depending on the state of origination. All of our private lending investments are also secured with a 1st position mortgage or deed of trust on real property or land with loan to value ratios not exceeding 70%. All of our loans close through an escrow company and are secured with title insurance to protect your investments.

The person or entity receiving the loan proceeds (borrower/trustor) will be obligated to repay the loan and will be required to sign a promissory note which specifies:

◊ Amount of the loan (principal) ◊ Interest rate (interest) ◊ Amount and frequency of payments (debt service) ◊ When the borrower must repay the principal (maturity date) ◊ Penalties imposed if borrower does not repay per agreement (breach for non-payment, late charge for late payment, pre-payment penalty for early principal pay-off)

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product & services

executive Summary

Property Requirements & Due Diligence Process

Target Market Strategies

Frequently Asked Question

Investments Process

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1-877-452-6569