Private Money Refinance Loan for Rental SFR in La Verne, California

Mortgage Vintage, a hard money lender, funded a $300,000 1st lien position private money loan for the refinance of a single-family rental property in La Verne, LA County, CA. The real estate investor wanted to cash out equity but had challenges getting financing from other lenders due to their low credit score of 590, and the property also had an unpermitted room addition. We were able to able to overlook both of these factors since there was still a lot of equity in the property. Without factoring in the additional, the Broker Price Opinion (BPO) came in at $470,000, so the loan-to-value was 63.83%. We paid off an existing 1st mortgage and also provided cash-out to make repairs to the same property as well as pay off other debts. The tenant pays $2,300 per month which will help make the loan payments. We charged an interest rate of 8.50% with 3 months of prepaid interest, and the loan term has 6 months of guaranteed interest. The subject property is a 912-square-foot traditional style SFR with 3 bedrooms and 1 bath – very typical for the neighborhood. A unique feature of the property was that it sat on a large 6,850-square-foot lot. The unpermitted room addition was an obstacle that we have seen on many occasions. We were able to quickly assess the climate to lend on this unique property and close the loan in 7 business days. This SFR equity cash-out loan was funded in May 2019.