In March 2019, we provided a roughly $1.7 million loan for the acquisition of three neighboring lots, totaling 16,000 square feet (0.37 acres), in North Hollywood, Los Angeles as the future site of ten homes.
Recently, the borrower refinanced the property and paid back our investment in full. Per the terms of our loan agreement, we earned an annualized return of roughly 10% over the life of the investment, which exceeded the initial stated rate because we charged the borrower additional penalty interest when they failed to meet the agreed-upon reporting requirements.
Investor FAQ: How does this project impact your portfolio?
This investment was structured as debt, where the borrower 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 this investment, the regular income it generated supported quarterly dividends for the Income eREIT II.
As always, if you have any questions or feedback, please visit our help center or reach out to us at investments@fundrise.com.
