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Date: 11 December 2023

Safe and easy investing in commercial mortgages with Pearl Capital

Who said investing had to be complicated? Pearl Capital likes to make things easy for investors. With a simple and safe commercial mortgage fund, the driven team of experienced real estate professionals wants to do things differently. “Our motto is: keep it simple.”

When Pearl Capital CEO Jacob Thalen explains how it works, it sounds almost impossibly simple. “Our investors invest in a commercial mortgage fund. We pay them a net interest rate of 6%. We don’t charge fees, extra costs, or any other hidden charges. And investors always have the first registration on the mortgage for the real estate we finance.”

Years of experience

When asked about the approach and vision of Pearl Capital, it turns out to be the result of many years of practical experience. “We have more than twenty years of combined experience in real estate and finance, for example as developers and real estate financiers. We know the drill and we know where the sector’s bottlenecks are.”

Pearl Capital provides short-term (bridging) loans to real estate professionals. Thalen explains a recent scenario: “An entrepreneur in Amsterdam bought a beautiful canal-side property to turn into five rental apartments. Financing through the bank turned out to be complicated and would take too long. Furthermore, a building fund account was not possible through the bank. We financed the purchase and entire renovation, including a building fund account. After the renovation, the real estate entrepreneur will refinance the apartments through a major bank. This gives us a clear exit strategy in advance, while the entrepreneur gets immediate financing to continue his business.”

Faster and more flexible

Pearl Capital’s approach is faster and more flexible than that of major banks and other lenders. “Real estate professionals have a great need for capital. On the other hand, investors are looking for safe and simple investments that they don’t need to engage with too much. We bring that supply and demand together.”

During that period, Pearl Capital pays out 6% fixed net interest to investors quarterly. After the initial term, the agreement is renewed for 6 months at a time, making sure investors can create a continuous cash flow from their invested capital. “We have noticed that the investors we service don’t want to have any work with their investment. That’s why we like to keep things simple,” explains Thalen.

Security for investors

“We make investing easy for investors because we do our homework,” the CEO continues. “We pay out a quarterly net interest rate of 6%. This means we have to critically assess the commercial real estate projects that we finance in the short term. We only provide loans when we have full confidence in the outcome, because we will pay our investors no matter what. If we don’t do our due diligence, we would be harming our own business model.”

Furthermore, Pearl Capital offers additional security. Investors always get first registration on the mortgage – jointly across all current projects. The real estate professionals also sign privately on the loan. “We finance a maximum of 70% of the property. Additionally, the exit – how Pearl Capital gets its money back – needs to be clear before we provide a loan,” Thalen adds.

Investing securely from €100.000

Pearl Capital wants to make things easy and simple for anyone who can invest from €100.000. “Our investors seek returns on their investment, as an income or as an extra. That’s why we like to take the financial homework out of their hands,” says Thalen.

He continues: “None of our investors have cancelled their investment yet, because they appreciate how easy we make their lives. For us this is important evidence that we’re on the right track and that we can start offering our product to a wider audience.”

At the end of the day, Pearl Capital mostly wants to offer ‘simple and safe investments’. “That’s why we don’t believe in 1-on-1 loans between lenders and entrepreneurs. We group investors together and finance various short-term real estate projects with their capital. That way, we spread risk and ensure a net interest rate of 6%,” Thalen concludes.

Source: https://www.deondernemer.nl/


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