This is a 15 month first trust deed in Chula Vista. It pays ½ point and 10.99% interest. The borrower is a 4 time client. His credit is in the low 600’s. There is a 3 month pre payment penalty. The loan is for $185,500.
The borrower is a professional flipper and mortgage loan officer. Zillow and Trulia have this property valued and $320,000 and $410,000 respectively and he is buying it for $265,000. I inspected the property yesterday and here is the youtube video I took.
It is 1800 square feet. 3 bedrooms, 2 baths and a garage. The neighborhood is very good. There are giant houses across the street and kitty corner from the subject property. The street is quiet and this is a place where someone would want to raise their children. It is a very solid area to live in.
The loan to value comes out at 70% of the purchase price. We are making the borrower put down 30% even though this property is being purchased under market. We do that for the safety of our investors. With all trust deeds, you have to ask yourself, “would I want to own this property if they didn’t pay me?” This is a case where you would want to own the property.
This property is rare nowadays. The real estate inventory is really low so when there is a property that goes up for sale and it is reasonably priced, there could be multiple offers. And because of the low inventory, there are fewer trust deeds available. The other way to get a trust deed is with a re-finance of an existing property.
This has what every trust deed investor is looking for. A nice safe Loan to value, an experienced flipper who is going to improve the property immediately, a nice neighborhood, a high interest rate and a good rate of return on your money and a short period of time where you don’;t have to tie up for your money for years.
Please call George Kengott if you are interested at 619-987-8639