Loan Purpose
Mortgage Vintage funded a $525,000 business-purpose cash-out refinance secured by a recently renovated single-family residence in Inglewood, Los Angeles County, California. The loan was structured as a first trust deed and was used to retire an existing first trust deed balance, provide working capital, and support the borrower’s ongoing real estate investment activities. The borrower, an active real estate investor, intended to hold the subject property as a rental and deploy additional cash-out proceeds toward business-purpose cash-out investment activities at a separate investment property. This Inglewood hard money loan was originated at 10.25% with a 36-month term, 6 months of Guaranteed Interest, and 3 months of Prepaid Interest, reflecting a disciplined structure designed to protect investor capital throughout the loan lifecycle. Trust deed investors participated in this transaction through the CrowdTrustDeed platform, Mortgage Vintage’s investor-facing lending marketplace.
Why This Inglewood Hard Money Loan Stood Out
- First trust deed lien position provided senior security for investors.
- 62.50% LTV against an $840,000 as-is BPO valuation delivered meaningful equity cushion.
- Recently renovated interior and exterior, including new windows, flooring, kitchen cabinets, quartz countertops, mini-split HVAC, and updated fencing, reduced near-term capital risk.
- Residential 2–4 Unit zoning offered future redevelopment flexibility, with a completed ADU conversion adding rental income potential.
- Projected combined rental income of approximately $5,500 per month supported a credible stabilization and refinance exit strategy.
- Only approximately $3,900 in minor deferred maintenance remained at the time of funding.
- Six months of Guaranteed Interest and three months of Prepaid Interest protected investor yield from early payoff.
- An existing Mortgage Vintage loan on the property—current and in good standing—was paid in full through escrow, demonstrating the borrower’s prior repayment history with the lender.
Property Description
The collateral securing this Inglewood hard money loan was a single-family residence originally built in 1926, containing approximately 796 square feet of living area on a 6,015-square-foot lot. The property featured two bedrooms, one bathroom, a detached one-car garage, and a patio. A garage conversion ADU with bathroom and kitchen facilities had been completed by the borrower, though permitting for the unit was still in process at the time of funding. The borrower committed to completing the ADU permitting following loan close. The property was zoned Residential 2–4 Units, providing additional long-term development optionality. Recent renovations were extensive and well-documented: new windows, doors, flooring, interior and exterior paint, kitchen cabinets with quartz countertops, mini-split HVAC systems, fencing, and a new water heater were all in place. Minor deferred maintenance items—including a sloping laundry room floor, an electrical panel cover, and landscaping—totaled approximately $3,900 and were noted for completion during the stabilization phase.
Investment Summary
The loan was funded at $525,000, representing a 62.50% loan-to-value ratio based on the approved $840,000 as-is valuation, with a net LTV of approximately 60.66% after accounting for associated costs. The 36-month term included 6 months of Guaranteed Interest and 3 months of Prepaid Interest, delivering an annualized investor yield of 10.25%. The minimum investment threshold for trust deed investors was $52,500. The borrower’s primary exit strategy was stabilization of the rental property followed by a conventional or alternative refinance. An existing first trust deed held by Mortgage Vintage with a balance of approximately $170,000 was retired through escrow as part of this transaction, establishing a clean first lien position. Noted underwriting considerations included a 575 middle FICO score attributable to a disputed auto payment that had since been resolved and elevated credit card balances incurred during the renovation period. The property was vacant at funding, with stabilization dependent on completion of the remaining minor repairs and ADU permitting. Mortgage Vintage evaluated these factors carefully and structured the loan terms accordingly to maintain appropriate investor protections.
Financial Details
| Field | Value |
|---|---|
| Loan Amount | $525,000 |
| Interest Rate | 10.25% |
| Lien Position | 1st Trust Deed |
| Loan Type | Cash-Out Refinance |
| Loan-to-Value (LTV) | 62.50% |
| Net LTV | 60.66% |
| As-Is Valuation | $840,000 |
| Loan Term | 36 Months |
| Guaranteed Interest | 6 Months |
| Prepaid Interest | 3 Months |
| Annualized Investor Yield | 10.25% |
| Minimum Investment | $52,500 |
| Occupancy | Non-Owner Occupied |
| Exit Strategy | Refinance Following Rental Stabilization |
Property Highlights
| Field | Value |
|---|---|
| Property Type | Single-Family Residence (SFR) |
| Location | Inglewood, Los Angeles County, CA |
| Year Built | 1926 |
| Living Area | Approximately 796 Sq. Ft. |
| Lot Size | 6,015 Sq. Ft. |
| Bedrooms / Bathrooms | 2 Bed / 1 Bath |
| Additional Unit | Garage Conversion ADU (Permitting In Process) |
| Zoning | Residential 2–4 Units |
| Projected Rental Income | ~$5,500/Month (Main House + ADU) |
| Recent Renovations | Windows, Doors, Flooring, Paint, Kitchen Cabinets, Quartz Countertops, Mini-Split HVAC, Fencing, Water Heater |
| Remaining Deferred Maintenance | ~$3,900 |
Frequently Asked Questions
Why would a real estate investor use a hard money cash-out refinance instead of a conventional loan in Inglewood?
Conventional lenders typically require stabilized rental income, pristine credit, and fully permitted improvements before approving a refinance. In this transaction, the property had recently completed renovations, an ADU with permitting still in process, and a borrower credit profile temporarily affected by construction-related expenses. A hard money cash-out refinance from Mortgage Vintage allowed the investor to access equity quickly, retire the existing lien, and deploy capital into additional investment activities while the property moved toward full stabilization—a timeline that conventional financing simply could not accommodate.
How does Mortgage Vintage protect trust deed investors when a property is non-owner occupied and currently vacant?
Mortgage Vintage addressed vacancy risk in this deal through several structural safeguards: a conservative 62.50% LTV against a documented $840,000 as-is valuation, a first trust deed lien position providing senior claim on the collateral, six months of Guaranteed Interest ensuring investor yield even in an early-payoff scenario, and three months of Prepaid Interest collected at funding. The property’s recent renovations, multi-unit zoning, and projected rental income of approximately $5,500 per month also supported a credible and near-term exit through stabilization and refinance.
What role does ADU zoning play in the underwriting of an Inglewood hard money loan?
Accessory dwelling units and Residential 2–4 Unit zoning meaningfully strengthen the investment profile of a hard money loan by expanding both the income potential and the resale market for the collateral. In this Inglewood transaction, the completed garage conversion ADU added projected rental income that supported the borrower’s stabilization exit strategy, while the underlying R2–4 zoning provided a longer-term redevelopment optionality that enhanced collateral value. Mortgage Vintage considers ADU income and zoning flexibility as positive underwriting factors when evaluating loan security in the Los Angeles County market.
Mortgage Vintage, Inc. is a California DRE-licensed hard money lender and trust deed investment company with extensive experience originating and servicing business-purpose loans secured by residential and commercial real estate throughout California. Our underwriting team brings decades of combined expertise in evaluating complex collateral scenarios, structuring investor-protective loan terms, and guiding borrowers from application through successful exit—delivering consistent, transparent results for both borrowers and trust deed investors.