Real estate investor sought a new business purpose cash-out 1st TD on this family-owned Owner Occupied tri-plex in Bellflower, CA in Los Angeles County. Funds from our loan will be used to allow one sibling to buy out the other two siblings on Title after the death of a parent. The borrower will be bringing in approx. $93k funds to close to pay off his siblings.
The subject property is 4,210 SF bungalow-style tri-plex sitting on a 20,861 SF lot. The property has a total of 3 units. Unit 1 is 1,279 sf and consists of 6 rooms: 3 bdrms/2 bath. Unit 2 is 957 sf and consists of 5 rooms: 2 bdrm/1ba. Unit 3 is 1,974 sf and consists of 8 rooms: 5 bdrms/2 ba. Unit 2 also has a 1 car garage. The property is just east of the 605 fwy and north of the 91 fwy and is close to schools and shopping. Exit strategy from our loan is a conventional refinance after the buyout of the siblings.
Market Rental Income is $7,250/month. In the short term, the property will have negative cash flow. The borrower has $210,000 documented reserves in his Union Bank account to cover the gap. These cash in the bank funds will also be used to rehab all 3 units. The front house is on a month-to-month and the Tenant in the other Unit has agreed to move out to allow for the rehab to the units. The borrower will move out of the 3rd unit after the remodel and altogether after the remodel, the estimated rents will be approx. $12,000/mo. which provides a significant positive cash flow.
What we like about this Trust Deed opportunity:
- Owner Occupied Investment Property
- 10.00% Annualized Return
- 6 months Guaranteed Interest
- 3 months Prepaid Interest
- $210k in the Bank as cash reserved
- Borrower bringing in $93k cash to close