Financial advisor Barry M. Kornfeld is co-founder of First Financial Tax Group (FFTG), a tax and income planning firm based in Florida. Barry Kornfeld’s group offers clients a safer fixed income alternative through First Position Commercial Mortgage notes (FPCMs), a real estate collateralized bridge loan.
FPCMs have first lien status on the commercial property securing the loan, thus the lender has a greater measure using the hard asset value backing the loan. Also, the specialty mortgage company that Kornfeld’s firm partners with, is considered the industry leader, and they take a second position, in every transaction, that is subordinate to all FPCMs. In other words, they have their own skin in the game, but they cannot get their funds (skin) out, until all of the FPCM funds have been returned, with interest.
In fact, the firm the originates the FPCMs will, in fact, contractually obligate itself to make payments to all FPCMs lenders, even if the underlying property borrowers defaults, and doesn’t pay them. They will do this because the high-value real estate supports the loans, and because it protects their second interest. What this means to FPCM clients is a more secure, and safer experience, from start to finish.