Loan Purpose
Mortgage Vintage funded a $1,200,000 first trust deed cash-out refinance secured by a fully occupied mixed-use commercial and residential investment property in the Lincoln Park area of San Diego, California. The borrower, a real estate investor and business owner, used the loan proceeds to retire an existing first trust deed of $765,000 that was in good standing, with the remaining funds directed toward new equipment purchases and minor residential apartment upgrades in support of business-purpose investment activities. The exit strategy called for a future refinance into a DSCR loan or the sale or refinance of another investment property to retire this obligation. Investors who participated through the CrowdTrustDeed platform gained access to a fully funded, income-producing hard money position in one of California’s most resilient urban markets.
Why This San Diego Mixed-Use Loan Stood Out
- The property was fully occupied at closing, generating $14,450 per month in combined commercial and residential rental income — comfortably exceeding the debt service on the new loan.
- The 64.86% LTV and 62.84% net LTV provided a meaningful equity cushion based on an appraised and independently reviewed value of $1,850,000, keeping investor capital well protected in first lien position.
- Investors earned an 11.00% annual return, backed by six months of guaranteed interest and three months of prepaid interest, offering both yield certainty and immediate income from day one.
- The property’s income stream was diversified across two retail tenants and two residential apartments, reducing concentration risk and supporting long-term asset stability.
- A 48-panel rooftop solar system added an energy-efficiency element that further enhanced the property’s appeal and long-term operating economics.
Property Description
The collateral securing this San Diego mixed-use loan was a 4,050 square foot mixed-use investment property situated on a 9,211 square foot lot in the established Lincoln Park neighborhood of San Diego, San Diego County, California. The property comprised two ground-floor retail spaces occupied by independent service and retail businesses, along with two two-bedroom, two-bathroom residential apartment units on the upper level. The site featured eight bathrooms in total, sixteen on-site parking spaces including one handicap-accessible stall, and a 48-panel rooftop solar installation. The property was valued at $1,850,000 using a 4.45% capitalization rate, supported by both a formal appraisal and an independent appraisal review. Its location offered convenient access to Downtown San Diego, major employment centers, public transportation corridors, and regional freeways, positioning it well for sustained occupancy and income performance. Mortgage Vintage structured this loan under its Commercial Hard Money Loan Program, which is designed for exactly these types of income-producing, mixed-use investment properties.
Investment Summary
Mortgage Vintage originated this $1,200,000 first trust deed at an 11.00% investor interest rate with a 24-month loan term. The loan was structured with six months of guaranteed interest and three months of prepaid interest, providing investors with strong income protection from the outset. The LTV of 64.86% and net LTV of 62.84% were calculated against the independently confirmed appraised value of $1,850,000. The minimum investment threshold was $40,000, and the loan was fully funded. The borrower’s FICO score of 611 reflected a single collection item related to a solar panel financing obligation, for which an active payment arrangement was already in place at the time of funding — a factor Mortgage Vintage evaluated carefully within the context of the property’s strong occupancy, income, and equity position.
Financial Details
| Field | Value |
|---|---|
| Loan Amount | $1,200,000 |
| Lien Position | 1st Trust Deed |
| Interest Rate | 11.00% |
| Loan Term | 24 Months |
| Deal Type | Cash-Out Refinance |
| Loan Purpose | Business-Purpose Investment |
| LTV | 64.86% |
| Net LTV | 62.84% |
| Appraised Value | $1,850,000 |
| Guaranteed Interest | 6 Months |
| Prepaid Interest | 3 Months |
| Minimum Investment | $40,000 |
| Loan Program | Commercial Hard Money |
| Status | Funded / Complete |
Property Highlights
| Field | Value |
|---|---|
| Property Type | Mixed-Use Commercial / Residential |
| Location | Lincoln Park, San Diego, CA |
| Rentable Area | 4,050 SF |
| Lot Size | 9,211 SF |
| Commercial Units | 2 Retail Spaces |
| Residential Units | 2 (2 Bed / 2 Bath each) |
| Occupancy at Funding | 100% Occupied |
| Monthly Rental Income | $14,450 |
| Capitalization Rate | 4.45% |
| Parking | 16 Spaces (incl. 1 ADA) |
| Solar System | 48-Panel Rooftop |
| Bathrooms (Total) | 8 |
| Occupancy Type | Owner and Non-Owner Occupied |
Frequently Asked Questions
Why would a lender fund a cash-out refinance on a mixed-use property for a borrower with a 611 FICO score?
Hard money lenders like Mortgage Vintage evaluate loans primarily on the strength of the collateral and the borrower’s overall financial picture rather than relying solely on a credit score. In this case, the property was fully occupied, generating $14,450 per month in rental income that more than covered the new debt obligation, and the loan carried a conservative 64.86% LTV against an independently confirmed appraised value of $1,850,000. The borrower’s lower FICO was traced to a single collection item for which a payment arrangement was already active, not a pattern of financial distress. When equity is strong and income is documented, a credit imperfection that has a clear and reasonable explanation need not prevent a well-structured loan from moving forward.
What makes mixed-use properties attractive as trust deed investment collateral in San Diego?
Mixed-use properties in established San Diego neighborhoods offer trust deed investors a diversified income foundation that single-use properties cannot match. When a property generates rental revenue from both commercial tenants and residential apartments simultaneously, no single lease expiration or vacancy event can eliminate all cash flow at once. San Diego’s strong employment base, limited housing supply, and sustained demand for neighborhood-serving retail have historically supported high occupancy rates in well-located mixed-use assets. For investors holding a first trust deed position, that income diversity and market depth translates into a more resilient collateral base and a cleaner path to loan repayment through refinance or sale.
How does the guaranteed interest feature work in a trust deed investment like this one?
Guaranteed interest is a contractual provision that requires the borrower to pay a minimum number of months of interest regardless of when the loan is repaid. In this transaction, the loan carried six months of guaranteed interest, meaning that even if the borrower refinanced or sold the property and retired the loan in the first few months, investors were still entitled to receive six full months of interest income. Prepaid interest, which was set at three months in this deal, is collected at closing and held in reserve, ensuring investors receive their first payments immediately without waiting on the borrower’s payment cycle. Together, these features provide trust deed investors with meaningful income certainty from the moment the loan funds.
Mortgage Vintage, Inc. is a California DRE-licensed hard money lender and trust deed investment company with extensive experience originating and managing commercial and mixed-use real estate loans throughout California. Our team applies rigorous underwriting standards, independent appraisal review, and disciplined loan structuring to every transaction, giving both borrowers and trust deed investors confidence that each deal has been thoroughly vetted before funding.