x

RSS Newsfeeds

See all RSS Newsfeeds

Global Regions

Global Regions ( XML Feed )
United States ( XML Feed )

May 7, 2015 1:45 EST

Luxurious Arcadia Rehab: a prefunded opportunity for a Single Family Residential property in California

iCrowdNewswire - May 7, 2015

 

 

Luxurious Arcadia Rehab

610 Estrella Avenue, Arcadia, California

 

  • 11%APR
  • $1,890,000 Investment Offering
  • 57%ARV
  • 12 MONTHS Loan Term
  • SINGLE FAMILY RESIDENTIAL
    Project Type

 

 

Investment Summary

This is a prefunded opportunity for a Single Family Residential property in California. The subject property address is 610 Estrella Avenue, Arcadia, California.

The developer is requesting a loan of $1,890,000 in order to purchase and renovate the underlying property. The property was purchased for a cumulative total of $1,750,000 in April of 2015. There is major renovation needed for the underlying property, totaling $350,000. The borrower will receive 5 draw(s) totaling $1,793,925 over the course of the loan. The initial draw in the amount of $1,443,925 occurs when the loan closes. The second draw of $100,000 will be disbursed when demolition and clean up is complete. The third draw of $100,000 will be disbursed when rough plumbing and electrical is complete. The fourth draw of $100,000 will be disbursed when sheet rock and plaster is complete. The fifth draw of $50,000 will be disbursed when renovation is complete and the lender obtains the certificate of occupancy. $34,650 (2 months) in interest reserve will be held by Patch of Land. The borrower plans to sell within 6 months.

610 Estrella Avenue

  • Purchase Price: $1,750,000
  • Renovation: $350,000
  • After-Rehab Value: $3,300,000

An independent third party appraisal shows an After Repair Value (ARV) of $3,300,000 for 610 Estrella Avenue. The collective ARV ratio is 57.27% and is in line with the data we found during our due diligence process. Our research shows the residential market surrounding the underlying property in this area of Arcadia is stable and supply and demand are in balance.

Financial Overview
Investment Needed Minimum Investment Loan Duration APR
$1,890,000 $5,000 12 months 11%
Valuation
Combined Appraised ARV 57% Loan to Combined Appraised ARV $3,300,000
Combined Zillow As-Is Value 86% Loan to Combined Zillow As-Is $2,197,428
Combined Homesnap As-Is Value 104% Loan to Combined Homesnap As-Is $1,820,100
Combined Trulia As-Is Value 86% Loan to Combined Trulia As-Is $2,193,000
Property Overview
610 Estrella Avenue was built in 1983, located in the suburban neighborhood of Arcadia, California. The property has 14 rooms including 4 bedrooms and 3 bathrooms, with a gross living area of 3,357 sq. ft. on a 15,935 sq. ft. lot. The property will be increased to 4,800 sq. ft. after renovations. The property is near Santa Anita Park and Arcadia County Park, public recreation centers, local schools, and shopping centers.

Renovation

610 Estrella Avenue

Property renovations are awaiting loan to start renovation and there is major renovation needed for the property. The following renovations are planned to be completed:

  • New Roof
  • New Vinyl Siding
  • New Windows
  • New Kitchen
  • New Baths
  • Pool Completely Redone
  • New Interior & Exterior Painting
  • New Hardwood Flooring
  • New Ceramic Floor Tile
  • New Iron Fencing
  • New Appliances
  • Full Landscaping Makeover
  • Approximately 1,400 square foot extension of property

Borrower

Covered Wagon Investments, Inc. has 3 managing members with a combined 60+ years in the real estate industry. Their knowledge of the business consists of direct experience in brokerage, lending, investing and managing both residential and commercial property. 2 of the managing partners co-founded a well-known brokerage firm based out of South Pasadena that boasts nearly a half billion dollars in sales since its inception in 2010. Between the 3 of them, the partners have rehabbed 7 properties in the last 3 years focusing primarily on the Greater Los Angeles Area and San Gabriel Valley.

Structure Overview
  • 12 month hold term at 11% APR, net of Patch of Land’s administrative costs.
  • Underlying loan secured by first position lien on title and personal guaranties of the individual developers
  • 610 Estrella Avenue: 3,357 sq ft / 14 Room / 4 Bedroom / 3 Bath Single Family Residential
  • 57.27% Collective ARV
Capitalization

The below financial estimates are based on Patch of Land’s investment of $1,890,000 to the developer that will hold title to 610 Estrella Avenue, Arcadia, California

The developer is contributing $325,075 in a combination of downpayment, any pre-existing contributions, and payment of closing costs. Patch of Land is contributing a $1,890,000 loan to purchase, renovate, and cover any additional closing costs for a total capitalization of $1,890,000. The amount will be issued to the borrower in 5 disbursement(s).

Purchase Price $1,750,000
Renovation Costs $350,000
Origination and Processing Fees $61,425
Interest Reserve $34,650
Closing Costs $19,000
Developer Contribution -$325,075
Total Costs $1,890,000
Valuation
Combined Appraised ARV 57% Loan to Combined Appraised ARV $3,300,000
Combined Zillow As-Is Value 86% Loan to Combined Zillow As-Is $2,197,428
Combined Homesnap As-Is Value 104% Loan to Combined Homesnap As-Is $1,820,100
Combined Trulia As-Is Value 86% Loan to Combined Trulia As-Is $2,193,000
Distributions

Interest will begin to accrue at the date each investors funds clear escrow.

Distributions of Interest only will be paid Monthly as loan payments from the Developer are processed. Borrower will pay Interest only payments in the amount of approximately $17,325 to Patch of Land which will in turn be distributed to you as an Investor Monthly at your fractional investment amount.

Total repayment of capital is expected on or before the end of April 2016. Distributions will be made directly into each investors Patch of Land accounts online.

Developer

Covered Wagon Investments, Inc. has 3 managing members with a combined 60+ years in the real estate industry. Their knowledge of the business consists of direct experience in brokerage, lending, investing and managing both residential and commercial property. 2 of the managing partners co-founded a well-known brokerage firm based out of South Pasadena that boasts nearly a half billion dollars in sales since its inception in 2010. Between the 3 of them, the partners have rehabbed 7 properties in the last 3 years focusing primarily on the Greater Los Angeles Area and San Gabriel Valley.

Risk Profile

Monitoring the risk factors in your portfolio is an important part of the due diligence process. As such, Patch of Land has created a proprietary risk profile for your review. In keeping with our policy of absolute transparency, we’re showing you the same risks, mitigants, and high level risk factors that play into our decision-making process.

This information is obtained from sources which we, and our suppliers, believe reliable, but we do not warrant or guarantee the accuracy of this information. To the maximum extent permitted by law, we and our suppliers disclaim any and all liability in the event any information proves to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Risk Subject Low / Medium / High
Loan to Value (ARV) 57.27%
Local Market Strong: Under 3 months market time
Borrower Track Record Successful resale portfolio of multiple properties
All 3 guarantors are licensed real estate brokers
Two members of the corporation have personal tax liens
Borrower Contribution $325,075
Risks Mitigants
1. The market falls enough to remove a profit motive for the developer 1. Arcadia, CA has shown stable growth over the past year, has a market time of under 3 months and home values are projected to increase over the next 12 months.

2. The property is being purchased below market value.2. Developer does not complete the project1. The developer has already contributed $325,075 to the project. The loan is funded at a collective 57.27% ARV. This allows for a reasonable expectation of recovery of capital in a liquidation scenario.

2. The underlying note issued by Lender is secured by 3 personal guaranties from experienced real estate professionals.3. Borrower personal tax liens1. The personal tax liens cannot be applied to this property as it is corporation owned.

View Related News >
support