In August 2017, we invested roughly $2.25 million in the acquisition of an 18,400 square foot (0.42 acre) property in the Highland Park neighborhood of Los Angeles, as the future site of 12 new homes. When we invested in this project, the property was improved with two homes.
We’re pleased to report that our partner has secured entitlements to subdivide the property into 12 smaller lots. The next step is to finalize design plans for the now-entitled property and market it for sale.
Based on the progress made on this project, we increased our investment by $150,000 to roughly $2.4 million and extended the loan for three months. During the extension period, our investment is expected to earn an increased annualized return of roughly 8.5%.
Investor FAQ: How does an individual project impact your portfolio?
This investment is structured as debt, where the project’s sponsor must pay us a fixed rate of return before they can earn a return for themselves, and their equity provides us with a cushion against losses. Throughout the term of the investment, the regular income it generates contributes to net asset value (NAV) increases for the Los Angeles eFund.
