Trust Deed Investment Opportunity - Seeking a Fractional Interest of 50% for $50,000 at 6 months with an 11% APY.

Transaction Synopsis: Borrower is seeking cash-out for investment funds.

Proposed loan collateralized against two free and clear SFR’s described below:

1. Richmond, CA 94806 – Property consists of single-story detached SFR, with 3 bedrooms and 1 bath, totaling 1,233 Sq. Ft GLA, built in 1950. Subject area is on a 5,100 +/- Sq. Ft. rectangular lot, located in the county of Contra Costa, city of Richmond. Borrower acquired this property at a trustee’s sale on 07-24-09 for $52,500 and made the following repairs - new carpets, new tile, new granite counters, new bathroom, new paint, new landscaping, new plumbing, new paint, new closets. (Appraised 10-27-09 for $95,000.) 

2. Richmond, CA 94801 – Property consists of two-story detached SFR, with 3 bedrooms and 2 bathrooms, totaling 1,530 Sq. Ft GLA, built in 1993. Subject area is on a 3,374 +/- Sq. Ft. rectangular lot, located in the county of Contra Costa, city of Richmond. Borrower acquired this property at a trustee’s sale on 10-27-09 for $94,000 and made the following repairs - new carpets, new paint, new fixtures, new granite counters in kitchen, new plumbing, new electrical, cleaned landscaping, refinished kitchen cabinets, new bathrooms and new tile floor. (Appraised 11-01-09 for $142,000.)

Risk: Subject properties are vacant and subject to vandalism. However, the hazard insurance policies will provide coverage for vandalism.

Compensating Factors: Subjects are in good condition, a low LTV and viable exit strategy.

Exit Strategy: Sale of subject properties (subject to partial release clause) will retire this proposed loan.
 

Investment Details:

Sub Address: Richmond, CA 94806. County: Contra Costa.
Prop Details: SFR - Detached
Lien Position: 1st TD
Loan Amount: $100,000
Protective Equity: $89,420.83 (see PE Worksheet below…)
LTV: 42.2% Based on As Is Value of Both Properties $237,000
CLTV: n/a
Subordinated Lien(s): n/a
Note Rate: 13% Annual Interest
Sold Rate: (Net Interest Rate) 11% (2% Servicing Premium - Hanover IS participating in Spread)
Amortization Type: Interest Only
Amortization Period: n/a
Term: 6 Months
Monthly Payment: $916.67 (Based on Sold rate of 11%)
Renewal: A one time 6-month extension may be granted at the sole discretion of Lender on a case-by-case basis based on loan portfolio status, payment history, property inspection and an extension fee of 4% (split 50/50 between Hanover Mortgage & Lender) to be paid prior to the extension.The extension terms to be outlined in the loan documents.
Payment Reserve: n/a
Cross-collateralization: Richmond, CA 94801 - APN:
Pre-Payment Penalty: Should the note pay off prior to 180 days, there will be 180 days worth of interest due, minus a pro-rata share of days “used”. There will be no pre-payment after 180 days, unless renewal is granted, then should the note pay off prior to 180 days, there will be 180 days worth of interest due, minus a pro-rata share of days “used”. There will be no pre-payment after 180 days.
Construction Holdback: n/a
Funds Control: n/a
Fees: Borrower to pay 4 points of the loan amount, plus a $1,195 Underwriting Fee, $595 Processing Fee, $450 Loan Document Fee and $500 Legal Fee to Hanover Mortgage plus all normal third party closing fees, such as title and recording fees.

The information above, though secured from sources believed to be reliable, cannot be guaranteed. The investor should independently verify this information to his/her satisfaction. All real estate markets can be negatively affected by interest rates, availability of capital, supply and demand factors and general economic conditions both locally, regionally and nationally. Each investor should review this summary with these risks in mind and base their investment decision on both existing market conditions and potential changes in the economy as well as your personal objectives and risk tolerance.