Featured Loan$700,000 Hard Money Second Mortgage in Los Angeles
Loan Amount: $700,000
Loan-To-Value: 68% CLTV
First Capital Trust Deeds secured a $700,000 hard money second mortgage for a project that was 80% complete in Los Angeles. The funds were used to complete the subject property and for down payment funds on another acquisition closing within a few weeks.
Over the past few years, FCTD has developed relationships with Real Estate Investment Offices that also lend out hard money loans, including this Southern California-based fund that provided the second position financing on this project. A few of the real estate offices we use to fund loans started to lend money in 2015 when real estate prices started to climb to a level they felt was unattractive. Instead of acquiring more properties, they pulled cash-out of existing apartments and office buildings to start funding hard money loans, often in second position, like this project in Los Angeles.
The benefit of hard money lending is that the real estate office could place loans in second position at 10-12% interest rates with Combined Loan-To-Value (CLTV) between 65% to 75%, or at a level they’d feel comfortable owning the property in the event of default and foreclosure. The first choice, however, was to get the 10-12% yield on a performing loan, being taken out either by a property sale or refinance.