A southern California real estate investor obtained a $1,000,000 California luxury property private money loan to acquire an Orange County waterfront home. The real estate investor was seeking 24-36 month, low interest rate private money financing to acquire a beautiful waterfront investment property. The borrower was very strong but had recently acquired a new business, which became problematic in their pursuit of a jumbo bank loan to buy this property.
The borrower had been turned down by 2-3 jumbo bank lenders and realized that 24-36 month private money financing was the best course to take to close escrow on this investment property.
FCTD secured a $1,000,000 California luxury property private money loan from an investment fund specializing in high-end luxury homes with interest rates starting as low as 5.99% for the first year. The benefit of going with the lower interest rate private money was the payment would be similar to the payment on a jumbo bank loan. Because the private loan didn’t have a prepayment penalty, the client would be able to refinance as soon as a jumbo bank lender could see that the acquired business and this property, which had a long-term tenant in place, had been “seasoned” long enough to qualify for jumbo financing.
Overall, this was an excellent loan for the borrower and the lender. The borrower obtained possibly the lowest priced private money financing terms available in California. The lender was able to issue a $1,000,000 loan with at least $1,400,000 in protective equity, if not more.
Private Money Financing Terms:
- $2,400,000 Purchase Price
- $1,000,000 Loan Amount (42% LTV)
- 5.99% – 6.99% Interest-Only
- 24-Month Term
- No Prepayment Penalty