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What's our story?
Socotra Capital currently manages over $500 million in first lien loans secured by real estate and real estate holdings all across the country. Since 2007, Socotra Capital has funded more than 1,750 private money loans on commercial and residential properties, totaling over $1 Billion in loans funded. Socotra Capital is the acting manager of the Socotra Fund and the Socotra Opportunity Fund, two mortgage pools that provide capital for the majority of transactions.
To read the complete story of Socotra Capital, including how we started with our very first loan in 2007 and what our vision is for the future, we invite you to read The Socotra Story. This document also provides a detailed look at our investment products and the values that guide our firm.
The Socotra Fund
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The Socotra Fund, LLC focuses on cash flow through first deeds of trust on properties with a significant equity hedge. Structured much like a mutual fund, investor funds are pooled collectively in a portfolio of private money loans. The loans are diversified across numerous locations, property types, and borrowers, mitigating risk and protecting against exposure to regional market downturns. Socotra Capital's investment opportunities include stabilizing commercial real estate property, financing fix and flip residential projects, providing funding for quick escrow closures, and cash-out for business needs.
The Socotra Fund presently holds more than $250 million in loans on residential and commercial properties, with a targeted investor yield of 8% to 9%. The Fund does not rely on any type of leverage, providing increased stability and security by ensuring investor returns are not amplified in a downward market cycle. As of November 1, 2019 the Socotra Fund officially established a subsidiary Real Estate Investment Trust (REIT) as the official lender on all of its loans.
Residential loans are primarily comprised of single family residential loans, while commercial loans are a blend of mixed use, multi-tenant, and industrial buildings. The Fund’s managers monitor and advance all property taxes and insurance policies on the portfolio of loans. To ensure the security of the Fund’s investors, the Fund requires the use of independent third-party appraisals to determine property values, in addition to underwriting each borrower’s desired use of funds.
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91.0% *As of Dec 31, 2023 |
49.4% Loan To Value *As of Dec 31, 2023 |
8.2% Trailing 12 Months *As of Dec 31, 2023 |
8.5% Yield - Reinvest *As of Dec 31, 2023 |
The Socotra Opportunity Fund
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The Socotra Opportunity Fund, LLC focuses on capital appreciation and cash flow, primarily through performing and nonperforming first deeds of trust on properties with a significant equity hedge. Structured much like a mutual fund, funds are invested collectively in a portfolio of private money loans, diversified across numerous locations, property types, and borrowers. In select cases, the Opportunity Fund considers equity and second deeds of trust if there is a significant opportunity relative to risk.
Targeted investment opportunities include stabilizing commercial real estate property, financing fix-and-flip residential projects, providing funding for rapid escrow closures, and cash-outs for business needs. The Socotra Opportunity Fund presently holds over $80 million in capital and is designed to take advantage of slightly higher risk investments than the more conservative Socotra Fund. This higher risk tolerance delivers a correspondingly higher yield target of approximately 9% to 10%, compared to the Socotra Fund’s annual yield of 8% to 9%.
Since its inception, the Socotra Opportunity Fund has distributed cash flow every month, due in large part to a careful balancing of long- and short-term goals. Capital appreciation is the Fund’s long-term goal. The short-term goal in this economic cycle is to maintain the Fund's yield target of 10%, while maintaining an LTV target of less than 50%. Within the next 36 months, at the beginning of the next anticipated market cycle, the Fund is expected to outperform the market and take advantage of premium opportunities, purchasing nonperforming notes and properties on the courthouse steps at steep discounts.
As of December 1, 2022 the Opportunity Fund officially established a subsidiary Real Estate Investment Trust (REIT) as the official lender on all of its loans.
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97.2% *As of Dec 31, 2023 |
47.5% Loan To Value *As of Dec 31, 2023 |
8.7% Trailing 12 Months *As of Dec 31, 2023 |
9.1% Yield - Reinvest *As of Dec 31, 2023 |
The Herzer Financial Mortgage Fund
The Herzer Financial Mortgage Fund, LLC (Herzer Fund), focuses on consistent cash flow by investing in trust deeds secured by properties with a significant equity hedge. Similar in format to a mutual fund, investor capital is pooled collectively and invested in a portfolio of private money loans, which include ground up construction loans, bridge loans, fix-and-flip residential projects, consumer bridge loans, business-purpose loans, and cash-out refinances for business purposes.
The Herzer Fund presently holds more than $50 million of investor capital. Investments in the fund are subject to a lockup period of 12 months, with liquidity becoming available on an annual basis. The Herzer Fund targets investor yields of 7% to 8%. As of August 1, 2023 the Herzer Fund officially established a subsidiary Real Estate Investment Trust (REIT) as the official lender on all of its loans.
Investor returns were generated in the past with a high degree of consistency—even amid turbulent economic developments such as the global financial crisis of 2008—all while subjecting investors to minimal amounts of risk. The Herzer Fund practices disciplined underwriting and seeks opportunities where there is ample equity cushion to minimize negative impacts during any downward market cycle.The Fund’s managers monitor and advance all property taxes and insurance policies on the portfolio of loans. To ensure the security of the Fund’s investors, the Fund requires the use of independent third-party appraisals to determine property values, in addition to underwriting each borrower’s desired use of funds.
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98.5% *As of Dec 31, 2023 |
51.3% Loan To Value *As of Dec 31, 2023 |
7.7% TTM Yield *As of Dec 31, 2023 |
8.0% TTM Rate of Return *As of Dec 31, 2023 |
The Private Client Group
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The Socotra Private Client Group focuses on first lien loan opportunities secured by properties with a significant equity hedge. As a member of the Socotra Private Client Group, individuals invest alongside The Socotra Fund, The Socotra Opportunity Fund, Herzer Financial Mortgage Fund and other members of the Private Client Group holding individual title on the note. The Socotra Private Client Group is composed of champion investors who have qualified to invest in these select individual loan opportunities.
These loan opportunities have been selected as offerings exclusive to the Private Client Group due to a need to limit various risk factors within our fund offerings, even though these loans meet the Fund’s investment criteria. These risk factors include but are not limited to loan concentration on an individual property, borrower concentration, geographical concentration, and other risks where having partners on the note mitigates and protects against exposure to regional market downturns. The Socotra Private Client Group investment opportunities include stabilizing commercial real estate property, financing fix-and-flip residential projects, providing funding for quick escrow closures, and cash-out for business needs.
The loan portfolio currently managed for the Socotra Private Client Group accounts for more than $50 million in loans, with an investor yield of approximately 9.0% for the calendar year 2023. Private Client Group members own these notes individually while servicing and management is maintained by Socotra Capital.
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