UC Funds

BACKGROUND

Introduce your business and what you do there.

I’m a commercial real estate developer working in conjunction with another development entity to construct apartment buildings.

OPPORTUNITY / CHALLENGE

What challenge were you trying to address with UC Funds?

They’re a hard money lender that provides construction financing for development projects like ours. We connected with them for a construction loan to build the project.

SOLUTION

What was the scope of their involvement?

They were looking to fund a 74-unit apartment project. We had conversations with representatives at the fund about the deal. They seemed interested in the deal, and we supplied them with all the information they wanted. Ultimately, they gave us a term sheet contained the terms we discussed for their funding of our construction of the building.  

After signing the term sheet, we spent $40,000 upfront to cover the costs of an appraisal and other reports for the project, which is normal. 

We needed their committee approval before continuing the project on our end, and they repeatedly told us that we were just waiting on 1–2 signatures from people on vacation but otherwise, the project was moving full steam ahead.

This was not the case, and they lost their source of funding for the project. They were unable to come up with a new funding source, so we terminated the relationship. 

What is the team composition?

We worked primarily with Domenico (Managing Director of Sales).

How did you come to work with UC Funds?

I believe we connected with them through a broker. 

How much have you invested with them?

They were lending us roughly $16,000,000. 

What is the status of this engagement?

We worked together from May–October 2020.

RESULTS & FEEDBACK

What evidence can you share that demonstrates the impact of the engagement?

Their impact was very detrimental. The two people on their committee who had not approved the loan were working with another insurance company that was concerned about wildfires in the area where the apartment would be built. However, their representative withheld that information from us for months, saying those committee members were just on vacation. 

We responded to them with data about wildfires in the area, proving that none of them had ever come near this site in the past. Furthermore, we had an insurance company sign off on the project with no concerns, so we were surprised that wildfires became an issue. 

The insurance company pulled their investment, and UC Funds told us they were eagerly looking for other funding sources. We gave them a week to find another funding source, but they couldn’t. 

They said they spent all but $2,800 of our $40,000 investment, so they offered to give us that $2,800 back. I thought we’d be receiving all our money back because it was their team that couldn’t live up to their end of the deal. 

I made them an offer to call it even if they returned $20,000 back to us. They didn’t do that. Instead, they only returned the $2,800 they didn’t spend. It was unprofessional to withhold information about why their committee wouldn’t sign on the project. They should’ve been more forthcoming and willing to split the balance when they failed to perform.     

How did UC Funds perform from a project management standpoint?

They withheld the truth about their committee signatures, took $40,000 from us, and didn’t deliver anything we asked. I asked to speak with their CEO in response to this but was never afforded that opportunity.

What did you find most notable about them?

They were very unprofessional in their handling of this project. Their team was not upfront about why their committee members wouldn’t sign off on our project, and their argument about wildfire concern didn’t make much sense. In the meantime, we were incurring costs and not looking for other funding options. 

Are there any areas they could improve?

Their handling of our deal wasn’t fair, professional, or appropriate. 

Do you have any advice for potential customers?

I wouldn’t consider doing business with them ever again.