The purpose of this loan was to refinance out of a $4.5M 1st TD construction loan that’s at a higher rate, that was current, in good standing and matured in December of this year; 320k of this loan going towards 5 mos. of investor prepaid interest and the remaining 490k will be used towards expanding borrower’s successful cannabis business. Borrower is the Founder/CEO of an international real estate investment and property management corporation with locations in Tokyo, Japan and Torrance, CA.
Borrower has significant “skin in the game”. In 2018, borrower used $3.5M of their own personal funds + a $1M hard money loan to purchase this commercial subject property in Adelanto, CA. That $1M partial purchase loan has been paid off. Borrower has another $2.5M in personal funds put into the $7M construction project that’s completed with permanent improvements and upgrades to build this high-tech, high producing cannabis complex. Borrower recently acquired a $4M Japanese imported cannabis cultivation super-structure capable of doubling borrower’s current cannabis output, that is cemented to subject property. In total, borrower “skin in the game” = $10,000,000. Borrower’s cannabis business generated $4.8M in crop sales between Jan – June 2021; Borrower’s cannabis revenues are stable and increasing. P&L provided in investor file.
The subject property is a two story, commercial-industrial building comprised of 38,000 SF rentable space located on a .69 acre parcel with a single rollup truck door and 24×7 gated guard. This subject property is 100%, fully occupied, single tenant, borrower’s cannabis company, paying $120,000/per month in rent with 3% annual increases. All required state and local cannabis licenses and permits in place.
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:
- Very experienced real estate investor, broker and property management owner
- Borrower $10M “skin in game” in purchase of building, permanent improvements and cultivation systems
- Legally permitted/licensed cannabis business – single tenant/owner-occupied
- 14.00% Investor Yield
- 50.00% LTV / 47.08% Net LTV
- 12 months guaranteed interest
- 5 months prepaid interest
- $5,500,000 Gross Protected Equity
- Low Risk Enviroscreen Report
- P&L provided in Dropbox
