La Jolla Hard Money Business Purpose Home Equity Line of Credit

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La Jolla Hard Money Business Purpose Home Equity Line of Credit

First Capital Trust Deeds secured a second position $1,500,000 hard money business purpose home equity line of credit (HELOC) against an oceanfront home near Windansea Beach.

The self-employed borrower was able to use their primary residence as collateral for the business purpose loan since the proceeds were being used to fund real estate investments. This included a couple of high-end fix and flip projects in coastal San Diego. Therefore, the loan was considered business purpose rather than consumer purpose.

The benefits of using a HELOC versus a closed-end second trust deed for the borrower were that they only had to pay interest on the amount drawn against the line. Then they could pay down the loan after selling the flips, resulting in lower monthly interest-only payments, and could draw against the line at any time during the 24-month loan term.

From application to closing, the loan took approximately two weeks to close since the borrower already had an appraisal that only needed to be re-certified. The borrower also provided updated YTD financials, a copy of their first mortgage statement, photos of the flip properties that the HELOC funds would be used, and we were able to fund in two weeks.

Hard Money HELOC Terms:

  • $1,500,000 Loan Amount
  • 9.50% Interest-Only
  • 24-Month Term
  • No Prepayment Penalty
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