Title: CEO and Founder, Grand Coast Capital Group
Experience: 12 years
While serving as principal and managing partner at Triad Alpha Partners, where he specialized in commercial development and investment, Jeff Carter saw an opening in the small balance commercial sector. He seized on the opportunity and founded Grand Coast Capital Group in January 2013 to serve two niche lines of business with creative financing solutions.
On one side, the company provides private capital – debt and equity – to experienced local operators who are typically underserved by conventional lending and financing firms. Due to the timing of transactions made by this group, or the fact that the opportunities do not fit within the standard underwriting guidelines required by most banks or traditional lenders, Grand Coast Capital is able to provide financing solutions through its deep understanding of the underlying real estate and ability to execute in a unique manner.
The other line of business at Grand Coast Capital is its private equity funds, which allow high-net-worth individuals to invest alongside the firm in a commercial real estate portfolio generating attractive risk-adjusted returns that is professionally managed by Grand Coast Capital. The firm is currently managing two open-ended Regulation D private equity funds that total over $100 million in assets and are comprised of both debt and equity investments secured by commercial real estate.
Since its inception, Grand Coast Capital has raised more than $100 million in capital, invested more than $250 million in strategic real estate opportunities in the U.S. and Ireland, and originated more than 650 loans in 41 states. Recently, the 15-person team moved into its new headquarters in Quincy to meet the continued growth of the firm.
Q: What advantage does the Grand Coast Capital Group have over traditional banks and credit unions?
A: I would not consider Grand Coast Capital as being in direct competition with traditional banks and credit unions. We fill the gaps where traditional financing sources cannot compete, whether due to strict lending guidelines or the challenges presented in funding within a very short period of time. Our unique advantage is that we come from the operation and investment side of the real estate business. We understand the needs of our borrowing clients and work to create a smooth and seamless process that allows our clients to focus on sourcing and executing on their investment strategies.
We are very nimble and creative in how we structure and finance. We can typically fund a deal in as little as seven to 10 business days; where most traditional lenders can take as long as 60 days to complete their review and approval. In addition, we have greater flexibility in our investment guidelines, and can be more creative in our financing structure, ultimately allowing our borrowers to close more deals.
We do not necessarily have proprietary software and do not consider ourselves a fintech or crowdfunding platform. Rather, we view ourselves as a commercial lender and investor who can execute and streamline the entire process. Traditional banks and lenders can provide the cheapest capital, but are much more regulated and stringent in their ability to fund loans. The private or alternative lending space has become much more competitive in recent years, mainly due to the attractive current returns these loans are able to produce, as well as the lack of current return in other sectors such as fixed income, or even in the real estate equity space. Despite this competition, Grand Coast Capital has continued to grow because we are built as a true real estate company that focuses more on each individual investment, and in building “win-win” relationships with our borrowers. We are built for the long-term, and place emphasis on quality over quantity.
Q: Can you give B&T’s readers details about your operations in Boston and Massachusetts?
A: We continue to focus on expanding our lending and investment business in the Greater Boston and New England markets. Currently over 20 percent of our investment portfolio is in Massachusetts, which is typically comprised of smaller private loans made to experienced local operators. This local portfolio consists of mainly short-term, rehab loans to builder/developers seeking to purchase and improve properties, with a plan to sell within 12 months. We also are involved in a number of equity and joint venture deals with strong, local operators/developers.
Q: What are your goals for the company in the future?
A: We are very pleased with our current success and the growth we have achieved over the last four years. Our primary goal continues to be the same: invest, via debt or equity, in commercial real estate opportunities that generate attractive risk-adjusted returns for our investors, while placing continued emphasis on capital preservation.
As we look to the next year, our goal is to double our loan production and lending portfolio, and continue to identify opportunistic investment opportunities in the marketplace. The advantage and benefit we see moving forward is the investment track record we have built over the last four years, which has exposed us to larger capital providers and gives us the ability to scale as we see fit. The company was built for long-term success, which is driven by our diverse financing products and real estate portfolio, as well as a variety of capital sources to fund our growth. We are especially excited about our growth prospects and our brand-new office space. We are also currently hiring for new positions, setting up 2018 as another exciting year for us.
Carter’s Five Tips for Real Estate Investment:
- Basis: Buying an at attractive price is key to long-term investment success.
- Risk: Force yourself to identify at least three potential weaknesses in every investment, and try to structure to mitigate these risks.
- Leverage: Leverage is a great tool, but leverage should not be the reason for doing a deal. I look at every deal unlevered and that’s how I determine if I choose to invest.
- Patience: Ask yourself, “Are you ok holding this asset long-term?” If so, you have winner, but if not, you may want to reconsider.
- Self-awareness: Understand strengths and weaknesses. Play to strengths and surround yourself with a team that can backfill your potential shortcomings.