Loan Purpose
Mortgage Vintage successfully funded a $220,000 business-purpose cash-out loan secured by a second trust deed on a single-family residence in Hacienda Heights, California. The borrower utilized the loan proceeds for business-purpose investment activities. The loan was structured as business-purpose financing and was fully collateralized by the subject property, providing liquidity for the borrower’s investment-related activities.
What We Liked About This Trust Deed Investment
- Conservative 29.31% combined loan-to-value ratio provided substantial equity cushion with property valued at approximately $1.01 million
- Well-maintained property with recent upgrades including remodeled kitchen and bathrooms, updated flooring, and maintained exterior improvements
- Strong market fundamentals in established Hacienda Heights neighborhood with comparable sales ranging from $900,000 to over $1.2 million
- Short 24-month term with interest-only payments and prepaid interest reserves at closing
Property Description
The collateral securing this trust deed investment was a single-family residence located in Hacienda Heights, California. The property consisted of a one-story ranch-style home built in 1964 with approximately 1,782 square feet of living area on a 9,413 square foot lot. Notable features included an updated kitchen and bathrooms, engineered wood flooring, an in-ground pool, attached two-car garage, and well-maintained landscaping. The property was in generally good condition with only minor deferred maintenance noted.
Investment Summary
This trust deed investment was structured as four fractional interests of $55,000 each in the $220,000 second position loan. The loan carried a 12.50% annual interest rate with interest-only payments and a 24-month term. Mortgage Vintage secured the loan in second lien position behind an existing first trust deed balance of approximately $76,000, resulting in a conservative combined loan exposure of approximately $296,000. The investment included six months of guaranteed interest and three months of prepaid interest collected at closing, with monthly payments of approximately $2,291.67.
Financial Details
| Field | Value |
|---|---|
| Loan Amount | $220,000 |
| Interest Rate | 12.50% |
| Lien Position | 2nd Trust Deed |
| Term | 24 Months |
| CLTV | 29.31% |
| Net CLTV | 28.52% |
| Monthly Payment | $2,291.67 |
| Guaranteed Interest | 6 Months |
| Prepaid Interest | 3 Months |
Property Highlights
| Field | Value |
|---|---|
| Property Type | Single Family Residence |
| Location | Hacienda Heights, CA |
| Year Built | 1964 |
| Square Footage | 1,782 sq ft |
| Lot Size | 9,413 sq ft |
| Style | One-Story Ranch |
| Garage | Attached 2-Car |
| Special Features | In-Ground Pool, Updated Kitchen & Baths |
| Appraised Value | $1,010,000 |
Frequently Asked Questions
What makes a second trust deed investment attractive at this loan-to-value ratio?
At 29.31% combined loan-to-value, this investment offered exceptional downside protection with over 70% equity cushion in the property. Even in a significant market downturn, the conservative leverage provided substantial security for the trust deed investment while generating 12.50% annual returns.
How do guaranteed interest periods benefit trust deed investors?
The six-month guaranteed interest period ensured investors received consistent returns regardless of early payoff scenarios. Combined with three months of prepaid interest collected at closing, this structure provided predictable income and reduced payment risk during the initial loan period.
What are the advantages of investing in Hacienda Heights real estate markets?
Hacienda Heights offers stable residential values in an established Los Angeles County community with strong comparable sales data. The area’s proximity to employment centers and consistent housing demand provide reliable collateral values for trust deed investments, as evidenced by recent sales ranging from $900,000 to over $1.2 million.
Mortgage Vintage, Inc. is a California Department of Real Estate licensed lender (DRE License) specializing in hard money loans and trust deed investments throughout California. Our experienced team has funded hundreds of trust deed investments, providing investors with conservative loan-to-value ratios and borrowers with flexible financing solutions for real estate transactions.