California Hard Money Deal - Close

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5 deals

California

The property is located on a corner with a traffic signal, one block off a major freeway with a direct offramp, diagonally across the street from a McDonalds, 48,000/day vehicle count, with a bus stop bench 25 feet from the order window. The property is currently unencumbered and has been owned by the same parties for 45 years, held in a LLC. Located in Long Beach, CA 90805. The loan is for a covered call strategy with protective puts. Involves purchasing stock outright, selling weekly calls for premium 1 to 2%, keeping 30% cash on hand for premium buybacks, all protected with yearly puts.

I’m using $87K NNN/yr divided by 2.57%, the return on the risk-free 10 year note of .57% plus 200 basis points or 2%. The 200 basis points figure is used because it is a premium property. Therefore, $87000 divided by 2.57 = $3,385,214 Property Value. I would like 33.33% up to 78% loan-to-value, or $1,100,000 to $2,610,000. If the higher percentage is allowed I will also purchase more commercial real estate. I’m looking for a rate equal to Fed Funds Rate, .25 plus 3%, or 3.25%, Prime Rate, or better. Duration of 20 years, no prepayment penalty.