Case Study$4,000,000 Business Purpose Second Mortgage
Loan Amount: $4,500,000
Loan-To-Value: 67% CLTV
Situation & Challenge
An Orange County investor wanted to use their primary residence, in Laguna Beach, for a business purpose second mortgage with cash out proceeds going toward the acquisition of commercial real estate project.
Private money lenders doing multi-million dollar second mortgages on primary residences, even for business purposes, aren’t easy to come by. But, they do exist and First Capital Trust Deeds closed a $5,000,000 owner-occupied business purpose second mortgage the year before.
Solution & Result
First Capital Trust Deeds worked with the same fund that they closed the $5 million loan with the summer before. After an appraisal and review of the acquiring commercial property, the lender funded the $4,000,000 loan.
The borrower was able to secure a 36-month term without a prepayment penalty. This gave the borrower the option of paying off the loan early or holding it for several years if the commercial real estate project went longer than expected.