Loan Purpose
Mortgage Vintage funded a $2,300,000 second trust deed cash-out refinance secured by a non-owner-occupied single-family residence in the prestigious gated Royal Oaks Colony community in Encino, Los Angeles County, California. The borrower, a long-established Southern California endodontist with nearly five decades of professional practice, sought this business-purpose loan to retire an existing second trust deed and direct the remaining proceeds toward cosmetic property improvements designed to strengthen buyer interest and maximize sale offers. The subject property was actively listed on the MLS and the borrower intended to repay the loan in full through the sale of the property within the 10-month loan term. For investors interested in similar opportunities, Mortgage Vintage offers a dedicated business-purpose cash-out refinance program structured for non-owner-occupied investment properties.
Why This Encino Hard Money Loan Stood Out
- 15.00% Investor Rate with 5 months prepaid interest and 6 months guaranteed interest, providing investors with strong, protected returns from day one.
- Robust Equity Cushion: Even at a conservative sale price of $8,000,000, investors benefited from more than $3,000,000 in remaining equity after accounting for the $2,700,000 first trust deed, the $2,300,000 second trust deed originated by Mortgage Vintage, and the estimated transfer tax burden of approximately $356,000.
- Dual Appraisal Validation: Both the primary appraiser and an independent appraisal review commissioned by Mortgage Vintage’s underwriting team concluded an as-is market value of $8,305,000, providing a high degree of confidence in the collateral valuation.
- Conservative CLTV: The loan closed at a combined loan-to-value ratio of 60.20% and a net CLTV of 58.30%, offering a meaningful margin of safety relative to the appraised value.
- Motivated Borrower with Active Sale Strategy: The property was listed at $8,495,000 with weekly showings already underway and multiple offers near the $8,000,000 range received, demonstrating active market engagement and a clear exit strategy.
- Seasoned Professional Borrower: The borrower brought nearly 50 years of continuous professional practice history in the dental specialty field, with an established reputation in the Southern California market.
- First Trust Deed in Good Standing: The existing first trust deed carried a low fixed rate of 2.00% with a PITI monthly payment of $15,412, was current at the time of funding, and does not mature until November 2046, posing no near-term balloon risk.
Trust deed investors who participated in this Encino hard money loan did so through the CrowdTrustDeed platform, where Mortgage Vintage makes fractional trust deed investments available to accredited investors.
Property Description
The collateral securing this loan was a custom two-story Mediterranean estate located within the Royal Oaks Colony, one of Encino’s most sought-after gated luxury enclaves situated adjacent to the prestigious Bel Air hillside market. The residence offered approximately 9,010 square feet of living space on a 1.20-acre lot featuring scenic mountain views. The home comprised 5 bedrooms, 6 full bathrooms, 2 half bathrooms, 12 total rooms, and an attached 4-car garage. Originally constructed in 1991, the property had been extensively upgraded with a newer clay tile roof, fresh stucco and exterior paint, a custom gourmet kitchen, remodeled bathrooms, premium fixtures, marble and hardwood flooring, and high-end custom finishes throughout. Additional amenities included six fireplaces, expansive indoor and outdoor entertaining areas, a large loft addition, covered patios, mature landscaping, and a private tennis court. Royal Oaks Colony was recognized for its gated privacy, estate-sized homes, tree-lined streets, and strong security profile, drawing executives, entertainers, professional athletes, and high-net-worth homeowners. The community provided convenient access to Ventura Boulevard’s upscale dining and retail, private schools, country clubs, medical facilities, and quick connectivity to the 405 Freeway and the Westside of Los Angeles.
Investment Summary
Mortgage Vintage successfully originated and funded this $2,300,000 second trust deed on behalf of its trust deed investors. The loan was structured with a 10-month term, a 15.00% annual interest rate, 5 months of prepaid interest, and 6 months of guaranteed interest, offering investors a high level of income certainty from the outset. The combined loan-to-value ratio stood at 60.20% against the independently validated appraised value of $8,305,000, with a net CLTV of 58.30% after accounting for estimated selling costs. The minimum investment in this offering was $71,875. The borrower’s clear and near-term exit strategy through a pending property sale, combined with the conservative leverage position and dual appraisal confirmation, made this a compelling trust deed investment opportunity in one of Los Angeles County’s most desirable luxury residential markets.
Financial Details
| Field | Value |
|---|---|
| Loan Amount | $2,300,000 |
| Lien Position | 2nd Trust Deed |
| Interest Rate | 15.00% |
| Loan Term | 10 Months |
| Loan Type | Cash-Out Refinance |
| Occupancy | Non-Owner Occupied |
| CLTV | 60.20% |
| Net CLTV | 58.30% |
| Appraised Value | $8,305,000 |
| 1st TD Balance | $2,700,000 |
| 1st TD Rate | 2.00% Fixed |
| 1st TD Maturity | November 2046 |
| Guaranteed Interest | 6 Months |
| Prepaid Interest | 5 Months |
| Minimum Investment | $71,875 |
Property Highlights
| Field | Value |
|---|---|
| Property Type | Single-Family Residence (SFR) |
| Location | Encino, Los Angeles County, CA |
| Community | Royal Oaks Colony (Gated) |
| Style | Custom Two-Story Mediterranean Estate |
| Living Area | Approx. 9,010 Sq Ft |
| Lot Size | 1.20 Acres |
| Year Built | 1991 |
| Bedrooms | 5 |
| Full Bathrooms | 6 |
| Half Bathrooms | 2 |
| Garage | Attached 4-Car |
| Notable Features | Six Fireplaces, Private Tennis Court, Marble and Hardwood Floors, Gourmet Kitchen, Loft Addition, Covered Patios, Mountain Views |
| Appraised Value | $8,305,000 |
| List Price (at Funding) | $8,495,000 |
Frequently Asked Questions
Why would a lender fund a second trust deed on a luxury property that is already listed for sale?
Second trust deed lending on actively listed properties can be well-structured when the collateral value, equity cushion, and borrower exit strategy align favorably. In this Encino transaction, Mortgage Vintage confirmed an as-is appraised value of $8,305,000 through both a primary appraisal and an independent review, resulting in a 60.20% CLTV with over $3,000,000 in residual equity above all liens and estimated selling costs. The borrower’s active listing, weekly showings, and received offers provided a credible and near-term repayment path, making the loan structure prudent despite its second-position lien.
What does ‘guaranteed interest’ mean for trust deed investors in a short-term hard money loan?
Guaranteed interest means that regardless of when the borrower repays the loan, investors receive interest for at least the guaranteed period specified in the loan documents. In this transaction, investors were entitled to 6 months of guaranteed interest, meaning even if the borrower sold the property and paid off the loan in month two or three, investors would still collect the full 6 months of interest income. Combined with 5 months of prepaid interest, this structure provided a strong floor on investor returns from the outset.
How does a high-value Los Angeles County luxury property perform as hard money loan collateral?
Luxury properties in established Los Angeles County enclaves such as Encino’s Royal Oaks Colony tend to offer meaningful collateral strength due to limited supply, consistent demand from high-net-worth buyers, and strong appraiser supportability. However, liquidity at the highest price points can be slower than mid-market properties, which is why conservative CLTV underwriting is essential. Mortgage Vintage addressed this by lending at 60.20% CLTV against a dual-validated appraised value, ensuring that even at a materially discounted sale price the loan balance could be recovered with equity to spare.
Mortgage Vintage, Inc. is a California Department of Real Estate licensed hard money lender and trust deed investment company with extensive experience originating, underwriting, and servicing business-purpose loans secured by California real property. Our team applies rigorous collateral analysis, dual appraisal review processes, and conservative loan structuring to every transaction, giving both borrowers and trust deed investors the confidence that comes from working with a seasoned and regulated lending professional.