Inland Empire Hard Money Loan

Amount
$770,000

Location
Riverside, California

Rate
10.0%

LTV
70.0%

Term
24 months

Type
Fix and Flip

Rural
Mixed-use Rural

Exit Strategy
Refinance with a Bank

The financing was secured by both a 1st trust deed and a 2nd trust deed on two adjoining parcels of land.

The 10.73-acre property includes an 864 sq. ft., currently uninhabitable 2-bedroom, 1-bath home valued at $1,116,000.

The total financing amount of $770,000 was structured as follows:

• 1st Trust Deed: $660,000, funded by Crescent Lenders
• 2nd Trust Deed: $110,000, privately funded by a Crescent Lenders team member

The 2nd trust deed will be used for improvements once the clean-up is completed on the existing uninhabitable small home in Riverside County, CA. 

The borrower paid $1,100,000 for the property, putting down 40% of his own cash and making up the difference with the 1st and 2nd trust deeds.

By simply cleaning up the property and making some renovations, the property is expected to increase in value.

The referring loan broker is confident in the borrower’s ability to refinance into a traditional bank loan once the stage 1 clean-up process is completed, a view also shared by the Crescent Lenders team.

Additionally, the family plans to sell another property in Riverside soon, with an estimated $1.0 million net equity, providing further assurance of loan repayment at maturity if needed.

Stage 2 of the project will add a new ADU and horse stables to generate horse boarding income, with an expected 12 to 18-month timeframe. 

The borrower is fully committed to this project and has the financial liquidity to see it through. 

The property features a city water connection, a well, a septic tank, and electric services from Southern California Edison. 

Sewer lines and gas connections are expected to be addressed as part of the stage 2 improvements.

Crescent Lenders funded the 1st Trust Deed based on the following factors:

1. Conservative Loan-to-Value: 60% LTV provides a substantial equity cushion for the lender.
2. Committed Borrower: Borrower has a strong cash position for renovations. 
3. Ability to Refinance: The borrower will likely qualify for a traditional bank loan after rehab is completed.
4. Additional Protection: The $100,000 2nd Trust Deed provides further security for the 1st TD loan. 
5. Strong Credit: Borrower has a tremendous financial history.

These assumptions are based on current market conditions, assuming no major economic shocks, and are consistent with standard 1st Trust Deed investments funded by Crescent Lenders in the past.