An Ignoble Experiment: The Discipline Behind Consistent Results: The Goodman Capital 38-Year Cycle-tested Investment Process

Dear Investor,

After exploring two recent case studies in last month's update, this month Goodman Capital is sharing the investment process behind those outcomes. You'll see how Goodman Capital applies a consistent diagnostic-style framework to every transaction. They also share how this same discipline is guiding the first investments in their fund LCSF II.

By way of disclosure, we have an advertising relationship with Goodman Capital, meaning we get paid for making this introduction and sharing this content. As always with these types of deals, consider this an introduction and not a recommendation. Every deal is unique and the responsibility to vet any and every deal you invest in still lies with you. This opportunity is available to accredited investors only.

Last month, we walked the White Coat Investor community through two case studies showing how disciplined structuring and fact-pattern underwriting turned post-banking-crisis dislocation into stable, low loan-to-value (LTV) investment opportunities for our investor community. This month, we go one layer deeper and analyze the investment process.

Just as physicians rely on a consistent diagnostic framework to evaluate symptoms, identify root causes, and prescribe targeted treatment plans, our consistent investment results come from applying a disciplined, repeatable process to every transaction we evaluate. Over the past 38 years, this framework has allowed us to source and structure tailored financing solutions for our borrowers and deliver steady, tax-efficient monthly income across all market cycles for investors.

Our End-to-end Investment Framework

At Goodman Capital, we have refined our six-step cycle-tested investment process, which we employ in every transaction. This process requires both investment management and asset management discipline, and forms the backbone of our low-LTV senior-secured mortgage lending strategy, one which has delivered zero principal losses since our firm's inception.

Goodman Capital

Investment Management: From Sourcing through Structuring

Step 1. Sourcing: Direct deal flow built over 38 years

Leveraging long-standing proprietary relationships with real estate sponsors, other lenders and industry professionals, our team reviews an annual deal pipeline of $15 billion+. Through diligent underwriting, our investment process rejects 95%+ of these opportunities, ensuring only the top 3 – 4% is shared with investors. These direct relationships allow us to source attractive, off-market deal flow with repeat high-quality borrowers with a historical track record of strong performance.

Step 2. Underwriting: Fact-pattern analysis

Every loan opportunity is evaluated through the three underwriting pillars outlined in our inaugural WCI newsletter, CBS: collateral, borrower and structure. Underwriting requires stress-testing the (i) collateral values under various market cycles and macro shock assumptions, (ii) borrower financial wherewithal to service the loan and (iii) loan structure to determine whether the opportunity presents an attractive risk-adjusted return for investors. The quality of the investment and ensuing returns are a direct reflection of the financial discipline and experience of the underwriter that analyzed the transaction.

Step 3. Structuring: Safety engineering

Leveraging an extensive credit toolkit of structures and strategies to manage principal risk, our investment team sizes every loan to ensure a maximum exposure of 60% LTV—with most loans today structured at ≤50% LTV. Based on the fact pattern of a given transaction, these risk-mitigation strategies may include cross-collateralizing multiple borrower assets, withholding static interest reserves (i.e., reserves held on deposit throughout the loan term), structuring floating interest rate loans with high-interest-rate floors, requiring extensive borrower guarantees, utilizing note-on-note structures, etc.

Asset Management: From Closing through Payoff

Step 4. Closing: Transition to asset management

Once a given investment has passed underwriting and structured for maximized risk-adjusted returns to investors, our seasoned team of legal professionals next schedules and oversees closing, the fulcrum transition in the investment process from investment to asset management. Among other events at closing, the loan documents are mutually executed by lender and borrower, our mortgage instrument is recorded and issued a title policy, insuring our lien as a valid first-position mortgage, and our firm is listed as an additional loss payee on the borrower's various insurance policies, ensuring priority repayment from the carrier in the event of property damage or loss (e.g., due to fire, flood, terrorism, etc.).

Step 5. Servicing: Proactive management throughout loan term

Servicing is paramount to successful asset management. Unlike many lenders, which outsource this laborious but vital function, at Goodman Capital, we service all of our loans in-house, ensuring proactive and immediate borrower action if and when needed in the event of borrower non-payment. The servicing process involves, among other functions, issuing monthly borrower interest statements, overseeing timely monthly borrower interest payment collections, monitoring the underlying collateral for any unpaid property taxes, carrying costs or other liens, processing construction draws, etc. In the event of a borrower non-payment or breach of any of the loan covenants, our in-house team of legal professionals, who bring in excess of 30+ years of foreclosure litigation experience through our distressed debt investment strategy, will take immediate action, including negotiating workout terms, issuing a default notice or commencing litigation, as needed.

Step 6. Payoff: Exiting with discipline

The final stage of the investment process is the payoff, or exit. Preparing for exit involves procuring payoff letters memorializing the outstanding loan amount and drafting lien releases and other related documentation to effectuate the repayment of our loan balance and release the subject collateral from our lien encumbering the property. Whether we are financing a $5 million or $75 million transaction, our ability to generate consistent returns is mirrored in our consistent, cycle-tested investment process, built on over 38+ years of experience managing private real estate debt investments.

Looking Ahead – LCSF II Launch
Applying our cycle-tested investment process to the first two fund investments.

As outlined earlier, our 38-year investment framework has guided our ability to consistently deliver low-LTV, senior-secured returns across multiple credit cycles. We are now pleased to launch our next income-oriented real estate investment trust (REIT) offering, Goodman Capital Liquid Credit Strategy Fund II (LCSF II) – the successor to LCSF I, which closed a $300 million+ senior-secured mortgage loan portfolio at a very conservative, <45% LTV, delivering stable, tax-efficient monthly income every month since inception with zero loan defaults or delinquencies to date.

That same disciplined process has already been applied to the first two opportunities identified for LCSF II's first offering round, closing in December 2025. Leveraging our fact-pattern-based underwriting approach – much like physicians applying a diagnostic framework to evaluate each patient individually – we have identified two very attractive opportunities: sub-50% LTV senior-secured mortgage bridge loans on Class A residential-oriented assets in Manhattan, NY and Long Branch, NJ: two supply-constrained, high-barrier-to-entry Northeast markets. These transactions reflect the exact type of low-risk, high-quality deal flow that our platform has been sourcing and structuring for nearly four decades.

What LCSF II Offers Investors

LCSF II is designed for physicians and high-income professionals seeking consistent, tax-efficient monthly income with significant downside risk protection. Key features of our offering include:

10% – 11% target net annual return
Monthly distributions, with optional DRIP for tax-efficient compounding
Low-LTV senior-secured lending mandate (max 60% LTV; first two deals <50%)
Exposure to Class A residential-oriented assets in high-barrier-to-entry Northeast markets
20% QBI deduction for taxable investors
No UBIT/UDFI, making the fund ideal for qualified investors (e.g., IRAs, Solo 401(k)s, etc.)
40 – 50% valuation discount benefits for Roth conversions
Seamless onboarding with Fidelity and Schwab, as well as other custodians

With two conservative, fully underwritten investments already identified, LCSF II is positioned to begin deployment immediately following the first-round closing in December 2025, with the first distribution expected in January 2026.

Reserve your Allocation – December Round Now Open

We invite the WCI community to learn more about LCSF II and how our offering may fit within a diversified portfolio. The first offering round will be closing in December 2025, with limited capacity still available. Thereafter, a second round will open in January 2026, with priority given on a first-come basis. To reserve your allocation or request additional details:

Schedule a call: Please click here
Email us anytime: invest@goodmancapitalllc.com
Visit our website: www.goodmancapitalllc.com/whitecoatinvestor

Goodman Capital is an alternative real estate investment firm specializing in real estate-backed private lending and built on a foundation of family experience dating back to 1987, when we originated our first senior-secured bridge loan on two multifamily walk-up properties in Harlem, New York. Today, our credit platform has grown to:

$900 million+ in closed mortgage transaction volume
1,000+ investor partners incl. HNW, family offices + institutional allocators
Integrated team of 10 investment and legal professionals
Robust institutional infrastructure with third-party administrators, auditors, and SEC counsel