Navigating the loan application process for real estate financing doesn’t have to be daunting.
By understanding the steps involved and knowing what to expect, securing financing can become one of the easiest parts of your real estate venture.
So where do you begin? Start with Cetan Funds, where we make the process simple and straightforward. Let us help you turn your real estate goals into reality.
Our Loan Application Process
Our loan application process is tailored to fit each unique real estate scenario. It begins with a simple online application, which helps us understand your needs and the type of financing you’re seeking.
Once you’ve submitted the application we’ll discuss the best loan options for your situation. At that point, we’ll request a few documents to finalize the loan terms and determine your eligibility.
You’ll submit these documents through our secure file upload portal and sign the application electronically to keep the whole process smooth and efficient. Typically, we ask for documents like your personal financial statement, recent bank statements, tax returns, and proof of income to get a clear picture of your financial standing.
We also ask for details about your background, including past real estate projects (if applicable), to better understand your experience. This helps us guide you toward the right loan and future investments.
For your current project you’ll provide plans, budgets, and a project timeline. In most cases, an appraisal is not required and we do our own in-house valuations once your application is complete and we’re in the underwriting stage.
Underwriting usually takes 1-2 business days once all required documents are received. Occasionally, additional information may be needed, but we’ll let you know promptly if that’s the case.
This process generally applies to residential bridge, rehab, or construction loans, which can be completed in 3-5 days. Commercial and multifamily loans may require additional documentation and take 2-3 weeks to process due to their complexity. However, we prioritize efficiency to help you start your project as quickly as possible.
Tips for Applying for a Loan
To ensure a smooth and fast loan application process, it’s important to have all your paperwork organized from the start. If you’re a regular real estate investor, keeping your financial information readily accessible is essential.
In addition to financial details, consider compiling a portfolio of past projects. This demonstrates your experience and helps build confidence in future investments. It’s also an excellent tool for presenting your achievements to loan officers and business partners.
Maintaining consistent financial stability is crucial. A solid relationship with your bank shows lenders that you manage your finances responsibly.
Be prepared to share a clear project plan with your lender. Include details like your timeline, contractors, materials, and other specifics to demonstrate your readiness and help us determine the appropriate loan amount.
Types of Loans We Offer
At Cetan Funds, we specialize in residential bridge, rehab, and construction loans. We also offer commercial and multifamily real estate loans, which may have additional requirements and longer processing times due to their complexity.
We provide free consultations, project evaluations, and property assessments to help you calculate the potential return on your investment.
At Cetan Funds, we strive to make the borrowing process simple and straightforward. Once your loan is approved and your project is underway, you can rely on us to support you every step of the way.
Our personalized attention and tailored lending options are designed to build long-term, successful relationships with our borrowers. Helping you build wealth through real estate is our specialty.
You can get started by contacting us here or in the form below.
Loan Inquiry
For more information on how Cetan Funds can finance your real estate project, please fill out our inquiry form below. We will respond in two business days.
Your Contact Information
Information collected will only be used to evaluate your loan.
Investor Inquiry
For more information about investing in Cetan Income Fund, please fill out our inquiry form below. We will respond in two business days.
Your Contact Information
Information collected will only be used to contact you.
Broker Inquiry
If you have a deal you need help funding or want to inquire about our Broker Referral Program, please contact us below.
Your Contact Information
Information collected will only be used to contact you.
General Inquiry
We’d love to hear from you. Please submit your inquiry below and we will respond in two business days.
Your Contact Information
Information collected will only be used to contact you.
General Investor FAQs
What is Cetan Income Fund’s Investment Objective?
Cetan Income Fund and Cetan Opportunity Fund (the “Funds”) are real estate debt funds that deliver consistent and attractive risk-adjusted returns to investors who seek preservation of capital and income.
Who Manages The Fund?
Our CEO, Mary Merriman, manages the Fund and lending operation. She has over 40 years of lending experience, holding a variety of executive-level positions at banks and an economic development lending organization. Steven Yett is actively involved in daily operations, fund management, and business development. Zach Smith is also an integral part of the team, leading loan originations and other business development activities. To learn more, please visit our Meet the Team Page or contact us.
Can Anyone Invest?
Cetan Income Fund: This Fund is only open to accredited investors with a net worth of $1,000,000 excluding their primary residence, or annual income of $200,000 for single filing status or $300,000 for joint filing status. This Fund is open to investors from anywhere in the United States.
Cetan Opportunity Fund: This Fund is only open to Oregon residents with either 1) a minimum annual gross income of $70,000 and a minimum net worth of $70,000 excluding their home, home furnishings, and automobiles; or 2) a minimum net worth of $250,000 excluding their home, home furnishings, and automobiles.
Can I Invest with IRA Funds?
Yes. Investors with a Self-Directed IRA account can invest in the Fund. Currently, we are well below our 25% threshold.
If you do not have a Self-Directed IRA account, we can help you create a self-directed IRA (SD-IRA) account and use those funds to invest in the Fund. Please contact us with questions and a list of IRA custodians we have worked with in the past.
Cetan Income Fund also includes a promissory note offering for accredited investors, which many of our IRA investors benefit from.
How Do I Track My Account Balance?
We provide investors a secure online investor portal to access subscription documents, quarterly statements, fund financial information, investor updates, and tax documents.
How Do I Withdraw My Investment?
Every equity investment has a 12-month “lock-up” period where withdrawals are only allowed for hardships and early withdrawal fees may apply. After this “lock-up” period, investors may withdraw at any time with at least 60-day notice.
How is Risk Mitigated?
Management actively monitors our real estate debt fund and mitigates risk by deploying several strategies:
1. We maintain a diversified portfolio of loan types, loan purposes, and geographic locations in Oregon and SW Washington. Our loan types consist of residential and commercial loans with subtypes of new construction, rehab, acquisition and development, and bridge/term. We only finance business-purpose loans that provide funding for purchases, refinances, rehabs, new construction, and development.
2. The portfolio’s weighted average loan size is typically below $500,000, so our transactions are small. Therefore, the projects tend to be more resilient given the high demand for affordable housing and when faced with conditions that negatively affect the real estate market.
3. Generally, our loan-to-value (LTV) ranges are from 60-75% in Cetan Income Fund and 65-80% in Cetan Opportunity Fund, with a portfolio target of a weighted average LTV at 65% or less for Cetan Income Fund and 70% or less for Cetan Opportunity Fund. To determine value we complete an internal evaluation that uses a variety of sources, including an Automated Valuation Model, Broker Price Opinions, as well as our direct sourced market and comparable data. On properties with a unique purpose or for larger loans, we typically order appraisals.
4. Loans are typically secured with first position liens. Cetan Opportunity Fund may also selectively fund loans secured with second position liens.
5. In Cetan Income Fund, loan terms range from 6-36 months with the weighted average asset life in the loan portfolio target of 12-15 months. In Cetan Opportunity Fund, loan terms range from 6-60 months with the weighted average asset life in the loan portfolio target of 15 – 21 months.
6. We use leverage minimally as it is not a permanent funding strategy. Cetan Income Fund has a bank line of credit that is used to meet temporary liquidity needs but rests it at $0 frequently during the year. Cetan Income Fund also offers 6 to 36-month Promissory Notes to investors who prefer to loan their money to the Fund rather than invest in equity or wish to have a mix of both. Cetan Opportunity Fund, on the other hand, was recently launched in 2023 and does not currently use leverage or offer promissory notes to investors. Once the Cetan Opportunity Fund reaches $5 million in assets under management, we may establish a bank line of credit to use to meet temporary liquidity needs. Management will always limit leverage in both Funds to a maximum of 20 – 25% of assets under management.
Why Do Banks Not Make These Loans?
This is because of several factors, including regulatory constraints, banks’ large overhead expense making smaller loans unprofitable transactions, and obtaining a bank loan often takes too long, or the process of obtaining it is complicated and expensive.
Though the typical borrower is creditworthy, they are seeking a loan that is not readily available from traditional banks and credit unions. Cetan Funds addresses this credit and service void in the marketplace by taking reasonable risk while processing applications with speed, transparency, and accuracy.
What Distinguishes Cetan Funds From Other Non-traditional Lenders?
The Cetan Advantage is what sets us apart from other lenders. It provides borrowers superior lending experiences. As a result, our investors are well positioned to realize a positive investing experience as well. The Cetan Advantage embodies the following values:
- Expertise
- Partnership
- Efficiency
- Flexibility
- Integrity
How Are Returns Calculated and Earnings Distributed to Investors?
Both Funds fully distribute net income to all investors on a pro-rata basis quarterly. All investors are treated equally as we do not have a preferred return, classes of shares, or any other preferential treatment.
We close the accounting quarterly, derive the net income, and then our fund management software calculates the distributions to generate investor statements. Dividends may be withdrawn or reinvested in additional shares. Generally, it takes two to three weeks to close a quarter and distribute the earnings to investors.
Are Your Financial Statements Audited?
Yes, our financial statements are audited annually by a qualified CPA firm that specializes in private equity funds that include real estate debt funds and are posted for existing investors as well as available for interested investors.
What Type of Income Will My Earnings Be Considered?
Equity investors earn ordinary income and will receive a K-1 schedule for their tax returns. For IRA investors, Unrelated Business Taxable Income is generated but is limited to the amount of income that is generated from leverage; hence, it is a very small percent. Promissory Note investments in Cetan Income Fund generate interest income, so this income is reported on a 1099 INT statement.
None of the information herein is to be construed as a solicitation, recommendation or offer to buy or sell any security, financial product, or instrument. Any projections or targets are aspirational only, are not guaranteed, and do not reflect past or current performance. Any report of past performance is no guarantee of any future performance. As with any investment, an investment in the Company is subject to risks, some of which could be substantial. No investment should be made in the Company by any investor who cannot afford to lose their entire investment. There are also restrictions on re-sale of Company securities and no investment should be made by any investor who cannot afford to hold the investment in the Company for a long period of time. This investment is only allowed and suitable for certain kinds of investors, who must have their investment status verified and confirmed in writing. No investment may be made, and no investment will be accepted unless the Company has received and approved the required written verification of each investor’s status.