We’ve invested $12.77 million in the construction of 29 condominiums on a 0.32 acre lot in the Koreatown neighborhood of Los Angeles. The borrower, Modern Development Expert, has already received the necessary permitting and entitlements to begin construction. This investment is the latest execution of our broader strategy to finance new construction in fast-growing areas around the country, particularly those experiencing housing shortages.
Business plan
The borrower plans to break ground on the site in the coming months, with completion of major construction expected in early 2020, and the homes being put up for sale shortly thereafter. Upon successful sale of the units, they plan to pay back our loan with the proceeds. Our goal is to earn consistent cash flow from interest payments through the duration of the project.
Why we invested
- Vibrant, walkable neighborhood: With a Walk Score of 92 (daily errands do not require a car), Koreatown is substantially more walkable than LA as a whole, which scores a 67. Originally an ethnic enclave for Korean immigrants, the area has transformed into a diverse urban center known for its bar scene and 24/7 casual dining, featuring in an episode of CNN travel show Parts Unknown.
- Convenient location: The property is conveniently located roughly midway between downtown and Hollywood, about half a mile from the Wilshire / Normandie Metro station and with good access to the regional freeways (I-10, I-110 and R-101).
- City-wide housing shortage: As a growing number of new homebuyers look to plant roots in urban LA neighborhoods, supply has been unable to keep pace with demand. Condo developments such as this one aim to meet that growing demand by building higher density housing on underutilized land. See our LA market analysis
