New loan against an investment property to retire a discounted second mortgage that has matured.
Subject property consists of a combined 2-Story, mixed-use improvement [commercial building with an attached 2-story single family home] zoned Commercial, totaling 4,199 +/- Sq.Ft., built in 1925 with an on-site open parking lot (for approximately 12 cars) located at the rear of building. Per Appraiser – The front of portion of improvement has mixed commercial uses and the attached rear portion is a 4 bedroom single family home. The first floor of the commercial portion of the improvements has two (2) tenants with one being a restaurant and the other as a tax preparation office. The 2nd floor tenants consist of a beauty salon and a photography studio. Site area is on a 7,852+/- Sq.Ft., interior, rectangular lot that fronts to a busy commercial street with local freeway access and is located in an area with a mixture of commercial, retail and service businesses, in the county of Orange, in the central section of the city of Santa Ana.
Subject property was acquired on 10-22-2009 for $575,000 and appraised 04-30-2012 AS IS for $600,000.00. Subjects Property 2012 Base Tax Value is $579,329. Occupancy is at 100% with Gross Rents at $5,370 per month.
Risk: THE SUBJECT PROPERTY IS ASSUMED TO NOT COMPLY WITH REQUIREMENTS OF THE AMERICANS WITH DISABILITIES ACT (ADA). NO HANDICAP PARKING, NO WHEEL CHAIR ACCESS & NO ELEVATOR EXISTS – THERE IS ONLY STAIR ACCESS TO THE SECOND FLOOR. PARKING LOT NOT STRIPED AND IN NEED OF REPAIR. THE 2ND FLOOR SALON UNIT, BATHROOM AND STORAGE AREAS HAVE ACOUSTIC CEILING MATERIAL THAT MAY CONTAIN ASBESTOS FIBERS. THE PRESENCE OF MOLD WAS DETECTED IN THE BEAUTY SHOP MAIN AREA & STORAGE AREA AND AN EXTERIOR WALL. ROOF NEEDS REPAIR DUE TO PAST WATER LEAKS.
Compensating Factors: Strong location, good cash-flow, stable rents, long term tenants, 100% occupancy, and a co-signer.
Exit Strategy: Predicated upon qualifying for conventional or agency financing.
Security – Second Deed of Trust on the property.
Sub Address – Santa Ana, CA 92780 – APN: 014-032-43
Prop Details – Mixed-Use Building
Lien Position – 2nd TD
Loan Amount – $82,500
Protective Equity – $178,000 (see PE Worksheet below???)
LTV – 37.50% Based on Appraised Value
CLTV – 51.25% Based on Appraised Value
Subordinated Lien(s) – n/a
Note Rate – 12.00% Annual Interest
Sold Rate (Net) – 12.00% (Hanover is not participating in a Spread)
Amortization Type – Interest Only
Amortization Period – n/a
Term – 36 Months
Monthly Payment – $825 (Based on Sold rate of 12%)
Renewal – n/a
Payment Reserve – n/a
Cross-collateralization – n/a
Pre-Payment Penalty – n/a