Loan Summary
Borrower is a seasoned construction professional with over 20 years of experience as a construction project manager, with a track record of successfully managing residential ground-up builds. Borrower owned this subject property “free and clear” for many years located in the Glassell Park area of Northeast Los Angeles, a transitioning neighborhood with a mix of older homes and new construction, driven by demand for its proximity to Downtown LA. Borrower took out a 1st TD to fund the construction of a brand-new investment build and sell SFR in Los Angeles, CA. $600,000 has been invested into the project, with the improvements now in mid-to-late construction stage. Due to cost overruns and remaining scope, an additional $270,000 is required to complete construction. The borrower sought $370,000 business purpose 2nd TD to complete the SFR. As part of our due diligence, we have obtained a new after-completion value appraisal reflecting an ARV of $1,550,000, along with a construction feasibility report that supports the remaining budget. Funds will be administered through a controlled disbursement process that includes a 15% contingency to mitigate completion risk. All permits/plans approved.
The 1st TD loan is current, in good standing with a principal balance of $601,071 with a 5.375% fixed rate through Feb 2030, with a PI monthly payment of $2,743, then becomes a variable loan maturing in Feb 2053. Borrower exit: sale of property to pay off 1st and 2nd within 12 months.
Property Description:
Upon completion, the property will be a newly constructed, contemporary two-story single-family residence totaling 2,233 SF, featuring 3 bedrooms and 3.5 bathrooms on an expansive 19,836 SF hillside lot with partial city and hillside views in the Glassell Park neighborhood of Northeast Los Angeles, CA . The home will include a detached two-car garage, modern interior finishes, and all new mechanical, electrical, and plumbing systems consistent with current market expectations for new construction. With an after-completion value of $1,550,000, the property is expected to compete directly with other new construction homes in the surrounding market. The borrower’s exit strategy is to sell the property upon completion, at which time both the existing $600,000 1ST TD and the new $370,000 2nd TD will be repaid in full through sale proceeds. The property benefits from convenient access to nearby schools, local parks and recreational areas, and major freeways in this Los Angeles area.
What we like about this Trust Deed opportunity:
- Brand new construction SFR with city and hillside views in Los Angeles
- 13.00% Investor Rate
- 1st TD current and in good standing loan
- Borrower and seasoned construction professional
- 6 months Prepaid Interest
- 6 months Guaranteed Interest
