Loan Purpose
Mortgage Vintage successfully funded a $1,105,000 business-purpose cash-out refinance secured by a first trust deed on a non-owner occupied single-family residence in Alhambra, Los Angeles County, California. The borrower, an experienced real estate investor with a 687 FICO score and approximately $400,000 in verified cash reserves, used the proceeds to retire an existing first trust deed that was current and in good standing, with the remaining funds directed toward business-purpose investment activities on a separate investment property held in the borrower’s portfolio. This business-purpose cash-out refinance loan program provided the speed and flexibility the borrower needed to execute on a time-sensitive investment strategy. The loan was structured with a 24-month term and six months of guaranteed interest, offering investors a reliable and well-secured return from day one.
Why This Alhambra Hard Money Loan Stood Out
- The subject property was 100% leased at $7,100 per month through May 2028, providing strong, documented income to support debt service throughout the loan term.
- The borrower demonstrated substantial liquidity with approximately $400,000 in cash reserves held across real estate business accounts, reinforcing confidence in the borrower’s ability to service the loan.
- At a 65% loan-to-value ratio against an appraised value of $1,700,000, investors enjoyed a meaningful equity cushion of approximately $595,000, providing a solid layer of collateral protection in a high-demand Los Angeles County submarket.
- The loan carried a 10.00% annual interest rate with six months of guaranteed interest, ensuring predictable returns for trust deed investors regardless of early payoff.
- The exit strategy was clearly defined, with the borrower planning to refinance or sell a separate investment property to retire the obligation.
Property Description
The collateral securing this Alhambra hard money loan was a well-maintained, two-story single-family residence situated in an established residential neighborhood in Alhambra, California, within Los Angeles County. The home offered approximately 2,533 square feet of living area on a 6,614-square-foot lot and featured five bedrooms and five-and-a-half bathrooms. Interior highlights included a contemporary design, a remodeled kitchen, central heating and air conditioning, dual-pane windows, and a desirable three-car garage. The property was fully leased at $7,100 per month through May 2028, reflecting strong rental demand in the area. Alhambra is a highly sought-after community in the western San Gabriel Valley, offering convenient access to Downtown Los Angeles, Pasadena, San Gabriel, South Pasadena, and major employment centers throughout Los Angeles County. The neighborhood is well served by parks, schools, dining, retail, and direct freeway access, all of which supported the property’s robust appraised value and leasing activity. Investors participating through the CrowdTrustDeed platform were able to review property photos, financial details, and due diligence materials prior to committing capital.
Investment Summary
This completed transaction was structured as a first trust deed at 65% loan-to-value, based on a recent appraised value of $1,700,000, resulting in an equity cushion of approximately $595,000. Investors earned a 10.00% annual interest rate with six months of guaranteed interest, providing downside protection against early repayment. The loan term was set at 24 months, and the minimum investment threshold was $44,200, allowing accredited investors to participate at an accessible entry point. Mortgage Vintage underwrote this transaction with a focus on borrower liquidity, collateral quality, documented rental income, and a clearly articulated exit strategy, all consistent with the company’s disciplined approach to trust deed lending in California’s competitive real estate markets.
Financial Details
| Field | Value |
|---|---|
| Loan Amount | $1,105,000 |
| Loan Type | Business-Purpose Cash-Out Refinance |
| Lien Position | 1st Trust Deed |
| Interest Rate | 10.00% per annum |
| Loan-to-Value (LTV) | 65.00% |
| Appraised Value | $1,700,000 |
| Equity Cushion | ~$595,000 |
| Loan Term | 24 Months |
| Guaranteed Interest | 6 Months |
| Minimum Investment | $44,200 |
| Borrower FICO | 687 |
| Occupancy | Non-Owner Occupied |
| Borrower Cash Reserves | ~$400,000 |
| Exit Strategy | Refinance or Sale of Separate Investment Property |
Property Highlights
| Field | Value |
|---|---|
| Property Type | Single-Family Residence (SFR) |
| Location | Alhambra, Los Angeles County, CA |
| Stories | Two-Story |
| Living Area | Approx. 2,533 Sq. Ft. |
| Lot Size | 6,614 Sq. Ft. |
| Bedrooms | 5 |
| Bathrooms | 5.5 |
| Garage | 3-Car |
| Kitchen | Remodeled |
| HVAC | Central Heating & Air Conditioning |
| Windows | Dual-Pane |
| Occupancy Status | 100% Leased |
| Monthly Rental Income | $7,100 |
| Lease Expiration | May 2028 |
| Freeway Access | I-10 & SR-710 |
Frequently Asked Questions
What is a business-purpose cash-out refinance hard money loan, and how does it differ from a conventional refinance?
A business-purpose cash-out refinance hard money loan allows a real estate investor to tap into existing equity in an investment property to fund business-related activities, such as improvements to other portfolio properties or working capital needs. Unlike a conventional refinance, which relies heavily on the borrower’s personal income documentation and typically takes 30 to 60 days to close, a hard money loan is primarily underwritten based on the value of the collateral and the borrower’s overall real estate experience and liquidity. Lenders like Mortgage Vintage can often fund these loans in a fraction of the time a bank requires, making them well-suited for investors who need to move quickly in competitive markets like Los Angeles County.
How does a guaranteed interest provision protect trust deed investors in a deal like this?
A guaranteed interest provision means that investors are entitled to receive interest payments for a specified minimum period, regardless of whether the borrower repays the loan early. In this completed Alhambra transaction, investors were guaranteed six months of interest at a 10.00% annual rate. This provision is particularly valuable in short-term hard money lending because borrowers sometimes refinance or sell quickly once their business objective is achieved. Without guaranteed interest, early payoffs could significantly reduce the total return to investors who underwrote the deal expecting a longer hold period. The six-month guarantee provided meaningful income protection from the outset.
Why is the western San Gabriel Valley, and Alhambra specifically, considered a strong market for trust deed investment collateral?
Alhambra occupies a strategic location in the western San Gabriel Valley, bordered by major employment and commercial corridors and offering direct freeway access to Downtown Los Angeles, Pasadena, and surrounding cities. This connectivity drives consistent residential demand and supports property values even during broader market slowdowns. For trust deed investors, strong collateral markets like Alhambra are important because the underlying real estate must be reliably marketable if a lender ever needs to recover principal through a sale. The subject property in this transaction was fully leased at $7,100 per month, further demonstrating active market demand and adding an additional layer of security for investors.
Mortgage Vintage, Inc. is a California DRE-licensed hard money lender and trust deed investment company with extensive experience originating, underwriting, and servicing private real estate loans across Los Angeles County and throughout the state. With a disciplined focus on collateral quality, borrower liquidity, and clearly defined exit strategies, Mortgage Vintage has built a consistent track record of funding business-purpose loans that deliver dependable returns to accredited trust deed investors in a wide range of market conditions.