Real Estate Investment Firms Provide Financing for Texas REO Projects

Two real estate investment firms based in Austin, Texas, have issued more than $5 million of financing to fund projects helping distressed properties in the state.

First Capital Funding and Principals Capital Funding, both debt and equity firms founded and operated by J.P. Newman, focus primarily on multifamily investment properties. Newman signified that the financing deals are “signs of the recovery of both the debt and equity markets.”

Most of the properties being purchased and funded as part of the $39 million market value for these projects are REO or foreclosure opportunities being purchased from banks. The projects are close to urban cities, including Houston, Dallas and Austin.

“Banks are saying ‘no’ to too many people these days and our goal is to offer a solid alternative. At the same time, individuals are seeking investment models outside of the stock market,” Newman said. “Our companies are stepping in to fill both voids by providing short-term financing to property owners, and investment opportunities in tangible assets to investors.”

Newman said first-lien lenders are pursuing this type of model because they can make consistent returns on an asset, especially in the real estate market.

“If the economy improves, the asset values improve,” Newman said. “If the economy goes down, then we’re well positioned by owning assets that provide housing at a reasonable price-point.”