A Los Angeles real estate investor sought a business-purpose 2nd TD cash-out for a duplex rental investment.
- Mortgage Vintage Loan at 62% CLTV of After Completion Appraised Value
- Funded loan in less than a week
- 10% Lender Rate
- 24 Month Loan Term
- 100% of the $433,000 placed in Funds Control
Originally a modest duplex, this property transformed into a lucrative rental opportunity, a testament to strategic real estate investment. This property began as a duplex with two 1-bedroom, 1-bathroom units, each spanning 598 square feet. An astute investor saw untapped potential, envisioning a revamped duplex with two additional Accessory Dwelling Units (ADUs), strategically expanding and enhancing the property’s earning potential.
Situated east of Marina Del Rey and Playa Del Rey and near LAX, schools, shopping, dining, and the 405 Freeway, this property held immense promise. The investor aimed to maximize space utilization, capitalize on the prime location, and significantly elevate monthly rental income.
To finance this, the investor chose a Business Purpose 2nd Trust Deed (TD) cash-out loan. The funds of $433,000 were placed in Funds Control. This safeguarded funds for duplex reconfiguration and ADU construction. Favorable loan terms included six months of guaranteed interest and a 10.00% annualized return.
Financials were impressive: $433,000 for renovation, an appraised value of $1,650,000 post-development. With a CLTV ratio of 62.00%, Net CLTV of 26.24%, and a FICO Score of 677, the investment stood strong.
This property transformation stands as a model success story in real estate investment. Key highlights include its prime location, a solid 10.00% annualized return, robust CLTV metrics, unwavering commitment to the project, substantial monthly rental income post-development, and six months of guaranteed interest.
Through meticulous planning and strategic investment, this property evolved from a modest duplex into a thriving, four-unit powerhouse with a monthly rental income of $ 13,200, solidifying its position as a standout real estate venture in Los Angeles.
Success Story: Glider Property Transformation – From Humble Duplex to Rentable Goldmine
Mortgage Vintage, Inc. (MVI) is a go-to hard money lender, always ready to support the goals of real estate investors and business owners. We’re particularly proud of our Business Purpose Cash Out. With our loans, investors can make the most out of their properties, turning simple duplexes into bustling rental spaces. Check out our work with a savvy investor on this Los Angles property—it’s a great example of what can be achieved with a bit of strategy and vision in real estate.
The Subject:
- Property: 8510 Glider Ave, Los Angeles, CA 90045
- Type: Duplex Rental Investment Property, expanded and renovated with additional ADUs.
- Layout:
- Existing Units: Initially 2x 1BR/1BA units (598 Sq Ft each), expanded to 2x 2BR/2BA units (840 Sq Ft each)
- New ADUs: 2 units, 1 BR/1BA (612.5 Sq Ft each)
- Condition: The original 2x 1BR duplex units set for reconfiguration and expansion.
The Scenario:
- An astute investor foresaw potential in this property, with an ambition to not just improve the existing duplex but to also introduce two new ADU units.
- The focus was not only on maximizing space but also on tapping into the property’s strategic location, east of Marina Del Rey, Playa Del Rey, and in proximity to LAX, schools, shopping, dining, and the 405 FWY.
- With a foundation of 2x 1BR units, the expansion and addition would catapult the monthly rents significantly.
The Solution:
- The investor opted for a business purpose 2nd TD cash-out, ensuring that the entirety of the loan proceeds ($433,000) would be channeled into Funds Control. This would safeguard the reconfiguration of the duplex and the construction of the new ADUs.
- Emphasizing favorable loan terms, the investor was presented with 6 months of guaranteed interest, and a competitive 10.00% annualized return.
Financials:
- Total Renovation & Construction Cost: $450,000
- Appraised Value: $1,650,000
- Monthly Rental Income (Post-Development): $13,600
- CLTV: 62.00%
- Net CLTV: 26.24%
- FICO Score: 677
Highlights:
This trust deed opportunity was particularly captivating due to:
- A prime location and the foresight to convert this property into 4 high-return units.
- The promise of a 10.00% annualized return.
- Solid CLTV metrics at 62.00% and Net CLTV at 26.24%.
- Full commitment to the project with 100% funds in Funds Control ($430k).
- The significant monthly rental income realized post-development.
- The assurance of 6 months of guaranteed interest.
By strategically planning and making smart investments, this property evolved from a simple duplex into a highly profitable four-unit property, firmly establishing itself as a remarkable real estate opportunity in Los Angeles.
