Very successful business owner, operator and real estate owner of “Stay Elevated LA” cannabis brand and existing cultivation center in Van Nuys, Los Angeles sought a 1st Trust Deed ground up construction loan to expand borrower’s own cultivation operations as well as generate rental income from other cannabis businesses in what will be this newly constructed multi-unit commercial industrial cannabis property in Adelanto, San Bernardino County, CA.
Borrower has significant “personal skin in the game” to date, $1,026,00 into this investment property and project between land purchase, borrower has paid in full for 2 of the 3 steel pre-engineered buildings and architect plans, city license & permit fees. Borrower is bringing another $313K “skin in the game” at closing of this loan towards 6 months prepaid interest and partial funds control. Borrower total skin in game after closing $1,338,000.
100% of the $2.5M 1st TD loan proceeds will be placed in Funds Control. A recent Construction Feasibility Analysis by MVI 3rd party accounting firm, verified construction budget is sufficient to complete scope of work to completion and a recent appraisal gave subject property an After Completion Value of $12,000,000.
The subject property will be comprised of 2 one story 10k SF pre-engineered commercial-industrial buildings and 1 two story 50k SF pre-engineered commercial-industrial buildings; totaling 70k SF of rentable space located on 2.4 acres (or 104,544s SF) single parcel. The 50K SF building with be broken out into 5 rentable units. All 3 buildings will have polyurethane roof panels, polyurethane wall panels and each rentable 10K unit will have a roll up door, main entrance and fire exit doors. All required state and local cannabis licenses and permits in place.
Fully occupied, this subject property will generate $175,000 monthly income ($2.50 PSF). Borrower has already secured lease agreements + deposits for 60K out of the 70k of subject property rentable space with lease start date April 1, 2022. (Lease Agreements in investor dropbox). Lease agreements are Triple-Net, 5 years with 3 renewal opportunities at a 5% annual increase.
Construction Budget detail and Plans provided in investor file. Buildings are Frame Construction Prefabricated Panel, CTU Floor Construction Concrete slab, Exterior Walls Prefabricated Panels and CTU Roof Cold rolled asphalt with fixed HVAC units.
Photos shown here are models of the 2 of 3 pre-engineered buildings borrower has purchased and are enroute from Patriot Steel Building and CangLong Steel.
Borrower has multiple exit strategies: private money refinance out of this construction loan or pay off through business & rental proceeds.
In addition to Borrower’s cannabis real estate cultivation centers, borrower’s StayElevated LA company is a premium brand of craft cannabis retailed in California dispensaries and home delivery. StayElevated won 1st place and 2nd place in 2021 for award-winning product in the “The Farmer’s Cup” cannabis competition.
Subject property is very well located in the heart of California’s cannabis industry growth center in Adelanto CA, next to the Southern California Logistics Airport also known as “Victorville Airport” a large commercial use airport designed to provide major corporations with logistics needs, access to a global gateway to the Western United States. Located also near Interstate 15 FWY. and the city of Victorville.
What we like about this Trust Deed opportunity:
- 100% Funds Control
- Very experienced cannabis business owner and operator
- Borrower $1.3M “skin in game”
- $175,000 mo. rental income
- 14.50% Investor Yield
- 20.83% ARV LTV / 19.17% Net ARV LTV
- 6 months guaranteed interest
- 6 months prepaid interest
- Legally permitted/licensed cannabis business – multi tenant
- Construction Feasibility Report Approved
- $9,500,000 Gross After Completion Protected Equity
