Loan Purpose
Mortgage Vintage funded a $128,000 business-purpose cash-out refinance secured by a fourplex multifamily property in Hawthorne, Los Angeles County, California. The borrower, an owner-occupant residing in one of the four units, sought a second trust deed to retire a small existing junior lien, fund minor improvements to the three occupied rental units, and deploy the remaining proceeds into business-purpose investment activities designed to increase household cash flow and support ongoing loan repayment. The three rental units were each leased at $1,800 per month, generating $5,400 in total monthly rental income at the time of funding. This Mortgage Vintage multifamily loan program transaction illustrated how income-producing residential properties can serve as effective collateral for strategic business-purpose financing.
Why This Hawthorne Multifamily Loan Stood Out
- The property appraised at $1,100,000, supporting a combined loan-to-value of just 64.95%, providing meaningful equity cushion for trust deed investors.
- The existing first trust deed carried a low 2.49% fixed rate on a 30-year term and was current and in good standing, reducing senior lien risk in the capital stack.
- Six months of guaranteed interest combined with six months of prepaid interest offered investors predictable, front-loaded income at a 13.75% annual rate.
- The property generated $5,400 per month in rental income from three of the four units, demonstrating real cash flow supporting the borrower’s repayment capacity.
- The net CLTV of 63.99% — calculated after accounting for estimated closing costs — reflected a conservative underwriting position relative to the appraised value.
Property Description
The subject property was a well-maintained, single-story fourplex situated on a 6,758-square-foot lot in an established residential neighborhood of Hawthorne, California. The structure offered 2,844 square feet of living space divided across four units, each configured as a one-bedroom, one-bathroom residence, yielding four bedrooms, four bathrooms, and twelve rooms in total. The property also featured an 800-square-foot detached four-car garage accessible from the rear alley. Additional amenities included an uncovered patio, concrete walkways, individual wall heaters, and window air conditioning units, with separate living areas maintained for each residence. The property’s location provided convenient access to Interstate 405, Imperial Highway, Crenshaw Boulevard, and El Segundo Boulevard, placing it within a strong rental demand corridor surrounded by multifamily housing, retail, schools, parks, and public transit options. Investors in this Hawthorne multifamily loan benefited from the property’s established income history and its position within the broader Los Angeles County rental market. Deal details were made available to accredited investors through the CrowdTrustDeed platform.
Investment Summary
Mortgage Vintage structured this transaction as a second trust deed at 13.75% interest with a 36-month term. The combined loan-to-value at funding was 64.95%, with a net CLTV of 63.99% after accounting for transaction costs, both calculated against the appraised value of $1,100,000. The loan included six months of guaranteed interest and six months of prepaid interest, providing investors with an income stream that was both protected and prepaid on the front end. The minimum investment participation was $32,000, and the deal was fully funded. The borrower’s credit profile reflected prior hardship circumstances that had since stabilized, with the first mortgage confirmed current at the time of origination. The planned exit strategy was credit rehabilitation followed by a conventional refinance.
Financial Details
| Field | Value |
|---|---|
| Loan Amount | $128,000 |
| Interest Rate | 13.75% |
| Lien Position | 2nd Trust Deed |
| Loan Type | Business-Purpose Cash-Out Refinance |
| Loan Term | 36 Months |
| Guaranteed Interest | 6 Months |
| Prepaid Interest | 6 Months |
| CLTV | 64.95% |
| Net CLTV | 63.99% |
| Appraised Value | $1,100,000 |
| 1st TD Balance | $586,415 |
| 1st TD Rate | 2.49% Fixed, 30-Year |
| Minimum Investment | $32,000 |
| Exit Strategy | Credit Repair & Refinance |
| Status | Funded & Complete |
Property Highlights
| Field | Value |
|---|---|
| Property Type | Fourplex Multifamily |
| Location | Hawthorne, Los Angeles County, CA |
| Stories | Single-Story |
| Living Area | 2,844 Sq Ft |
| Lot Size | 6,758 Sq Ft |
| Units | 4 (Each 1 Bed / 1 Bath) |
| Total Bedrooms | 4 |
| Total Bathrooms | 4 |
| Garage | 800 Sq Ft Detached, 4-Car (Alley Access) |
| Monthly Rental Income | $5,400 (3 Units at $1,800 Each) |
| Occupancy | Owner-Occupied + 3 Tenant Units |
| Appraised Value | $1,100,000 |
Frequently Asked Questions
Why would a hard money lender fund a 2nd trust deed on an owner-occupied multifamily property?
A second trust deed on a multifamily property can be well-supported when the combined loan-to-value remains conservative and the property generates demonstrable rental income. In this transaction, the 64.95% CLTV meant that over 35% of the property’s appraised value served as equity protection beneath the trust deed investors’ position. The $5,400 in monthly rental income from three of the four units provided an additional layer of repayment support beyond the borrower’s personal income, making the collateral profile attractive to Mortgage Vintage despite the junior lien position.
How does guaranteed interest protect trust deed investors in a short-term hard money loan?
Guaranteed interest means that investors receive their contracted interest income for a specified period regardless of whether the borrower repays the loan early. In this deal, six months of guaranteed interest ensured that investors earned their 13.75% return for at least the first half-year of the loan term, eliminating the reinvestment risk that typically accompanies early payoffs. Combined with six months of prepaid interest collected at origination, investors in this transaction had a substantial portion of their projected income secured from day one.
What makes Hawthorne, Los Angeles County an attractive market for multifamily trust deed investments?
Hawthorne is an established, supply-constrained submarket within Los Angeles County that benefits from proximity to major employment centers, strong freeway access via Interstate 405, and consistent renter demand driven by the broader Southern California housing affordability gap. Multifamily properties in this area have historically maintained high occupancy rates, which supports the rental income streams that underpin trust deed loan repayment. For investors evaluating collateral quality, a well-located, income-producing fourplex in a neighborhood like Hawthorne represents a tangible, demand-backed asset in one of the nation’s most resilient real estate markets.
Mortgage Vintage, Inc. is a California DRE-licensed hard money lender and trust deed investment company with extensive experience underwriting and funding income-property loans across Los Angeles County and the broader Southern California market. Our team applies rigorous due diligence — including independent appraisal review, lien position analysis, and rental income verification — to every transaction, ensuring that both borrowers and accredited trust deed investors are served by well-structured, transparently documented loans.