Mortgage Vintage successfully funded a $157,500 business-purpose cash-out refinance secured by an owner-occupied single-family residence in Capistrano Beach, California. The loan was structured as a second trust deed at 12.00% annual interest with a 36-month term, providing the borrower with capital to support business-purpose investment activities. Investors participated through the CrowdTrustDeed platform, with a minimum investment of $52,500. This Capistrano Beach loan closed with a combined loan-to-value ratio of 52.76%, offering meaningful equity protection throughout the loan term.
Why This Capistrano Beach Loan Stood Out
- Strong 52.76% CLTV based on a recent as-is broker price opinion valuation of $1,575,000, providing a substantial equity cushion for investors
- Approximately $744,000 in remaining property equity after accounting for both the existing first mortgage and the new second trust deed
- Owner-occupied single-family residence in an established suburban neighborhood with stable property values and an estimated marketing period of approximately 45 days
- No significant property damage or deferred maintenance issues were noted in the broker price opinion report
- Business-purpose financing structured to support equipment acquisition and expansion of the borrower’s contracting operations
Property Description
The subject property was a single-story, ranch-style single-family residence situated in an established residential neighborhood in Capistrano Beach, Orange County, California. Constructed in 1970, the home offered approximately 1,480 square feet of living space on a 6,105-square-foot lot. The residence featured three bedrooms, two bathrooms, an attached two-car garage, a fireplace, and stucco exterior construction. The property was owner-occupied at the time of loan origination. The surrounding neighborhood consisted primarily of single-family homes of similar age, design, and use, and the area reflected stable employment and real estate market conditions according to the broker price opinion.
Investment Summary
Mortgage Vintage originated this $157,500 second trust deed as a business-purpose cash-out loan program, secured behind an existing first mortgage with an outstanding balance of approximately $673,500 at a 7.25% interest rate. The loan carried a 12.00% annual interest rate, a 36-month term, six months of guaranteed interest, and three months of prepaid interest. The as-is broker price opinion established a property value of $1,575,000, resulting in a combined loan-to-value ratio of 52.76% and a net CLTV of approximately 52.42%. The borrower’s exit strategy centered on leveraging the acquired equipment to grow contracting revenues, improve creditworthiness, and refinance the second trust deed, with a targeted payoff horizon of the following summer.
Financial Details
| Field | Value |
|---|---|
| Loan Amount | $157,500 |
| Interest Rate | 12.00% Annual |
| Lien Position | 2nd Trust Deed |
| Loan Type | Cash-Out Refinance |
| Loan Purpose | Business-Purpose Investment |
| Loan Term | 36 Months |
| Guaranteed Interest | 6 Months |
| Prepaid Interest | 3 Months |
| CLTV | 52.76% |
| Net CLTV | 52.42% |
| As-Is BPO Value | $1,575,000 |
| Existing 1st Mortgage Balance | ~$673,500 |
| Estimated Remaining Equity | ~$744,000 |
| Minimum Investment | $52,500 |
Property Highlights
| Field | Value |
|---|---|
| Property Type | Single-Family Residence (SFR) |
| Style | Single-Story Ranch |
| Occupancy | Owner-Occupied |
| City | Capistrano Beach, CA |
| County | Orange County |
| Year Built | 1970 |
| Living Area | Approx. 1,480 Sq. Ft. |
| Lot Size | 6,105 Sq. Ft. |
| Bedrooms | 3 |
| Bathrooms | 2 |
| Garage | Attached 2-Car |
| Exterior | Stucco |
| Fireplace | Yes |
| Estimated Marketing Period | Approx. 45 Days |
Frequently Asked Questions
Why would a borrower choose a second trust deed cash-out refinance instead of other financing options?
A second trust deed cash-out refinance allows a borrower to access equity in an existing property without disturbing a favorable first mortgage rate. In this case, the borrower retained a first mortgage at 7.25% and tapped additional equity through a second trust deed to fund business-purpose investment activities. This structure is particularly useful when the cost of replacing the first mortgage through a full cash-out refinance would exceed the cost of layering a second lien on top of the existing loan.
How does a 52.76% CLTV protect trust deed investors in a second lien position?
A combined loan-to-value ratio of 52.76% means that the total debt secured against the property, including both the first and second mortgages, represents only about half of the property’s appraised value. In this transaction, the property was valued at $1,575,000, leaving approximately $744,000 in equity as a buffer beneath the investors’ position. Even if property values declined moderately, that equity cushion would need to be substantially eroded before trust deed investors faced any principal risk, which is one of the key risk-mitigation characteristics Mortgage Vintage evaluates before funding a second position loan.
What makes Capistrano Beach, Orange County an attractive market for hard money trust deed lending?
Capistrano Beach is a coastal community in southern Orange County with historically strong property values driven by its proximity to the Pacific Ocean, established residential neighborhoods, and consistent housing demand. The broker price opinion used in this transaction reported stable property values and employment conditions, with an estimated marketing period of only 45 days, reflecting a liquid resale market. These characteristics are favorable for trust deed lenders because they support the collateral value underpinning the loan and suggest that, if a sale or refinance were ever needed to satisfy the debt, the property could move relatively quickly in the open market.
Mortgage Vintage, Inc. is a California DRE-licensed hard money lender and trust deed investment company with extensive experience structuring second position loans secured by residential real estate throughout Orange County and the broader California market. Our team applies rigorous underwriting standards, independent broker price opinion analysis, and deep knowledge of trust deed law to deliver transparent, investor-grade lending solutions for both borrowers and private capital investors.