A seasoned Mortgage Vintage investor successfully transformed a Los Angeles duplex by renovating the existing units and constructing two new ADUs to expand rental income. Mortgage Vintage provided the construction capital through a business purpose 2nd TD that kept the project on schedule. The borrower has now closed on a conventional refinance and exited the loan.
The Subject:
- Address: Los Angeles, CA
- Type: Duplex with Planned ADU Expansion
- Layout (After Construction): 4 rental units totaling 3,949 SF
- Lot Size: 7,410 SF
- Condition: Duplex under renovation; ADUs to be built
The Scenario:
A previous Mortgage Vintage borrower with a 704 FICO score returned to secure a 2nd Trust Deed loan for continued property improvements. The existing duplex, located in a desirable Los Angeles neighborhood just east of Marina Del Rey and Playa Del Rey, was renovated with funds from the 1st TD holder. The borrower’s plan is to build two fully permitted 3BR/3BA ADUs in the rear, transforming the property into a four-unit income-producing investment. This property became an upgraded duplex and the newly constructed ADUs offer strong rental potential and a total projected monthly income of $15,500. The borrower’s exited the private money loan via a conventional refinance when construction was completed.
The Solution:
Mortgage Vintage provided a $460,000 2nd Trust Deed at 62.13% CLTV on the appraised value of $2,350,000. The loan included six months of guaranteed interest and three months of prepaid interest, and $430,000 of the loan proceeds were placed in Funds Control to be disbursed as construction progresses. With a strong location, attractive projected rents, and a borrower with proven performance, this trust deed offered a compelling opportunity for all.
The Numbers:
- Appraised Value: $2,350,000
- Loan Amount: $460,000 (2nd TD)
- CLTV: 62.13%
- Net CLTV: 43.15%
- Funds Control Allocation: $430,000
- Monthly Gross Rental Income (Projected): $15,500