This loan is a first deed of trust on four residential units located in Lucerne, CA. The subject is property is comprised of two parcels, each containing two units, situated on the north shore of Lake County near Clear Lake, CA. The subject properties' current residential use is considered "grandfathered" in by the city; however, they do not conform with the current zoning. The subjects are currently zoned for commercial uses such as office space, retail, hotel, or multi-family. However, they have been used as residential income properties since they were built in 1956, and per the appraiser, the current residential use is considered the highest and best use. The first subject property contains a total of 4-bedrooms, 2-bathrooms, and 2,190 square feet of living space on a 4,026 square foot lot. The downstairs unit was previously used as an office but has since been rented to the property manager for $897 per month. The upstairs unit is currently vacant with an asking rent of $875. The second subject property contains a total of 4-bedrooms, 2-bathrooms, and 1,327 square feet of living space also on a 4,026 square foot lot. The upstairs unit is rented for $750 per month, and the downstairs is vacant with an asking rent of $800. Per the appraiser, the subject properties are both rented below the $2,043 average market rent. The Borrower purchased the properties in 2016 for $300,000 and currently holds them free and clear. The purpose of the loan is to provide cash out for the Borrower to complete some renovations on the properties such as installing separate meters, paint, flooring, update the bathrooms, and exterior trim repair and paint. The balance of the funds will be used on similar repairs to his other rentals. Upon or prior to maturity, the Borrower will refinance into a longer-term loan or sell one of his properties to repay the debt.
Net Yield to Investor