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Completed Debt
Residential
La Cañada Single Family Loan
Flintridge, CA
INVESTMENT STRATEGY
INVESTMENT TYPE
Debt
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100% funded
Offered By Melody Estates LLC
%* TARGET IRR 9.0%-%
* TARGET EQUITY MULTIPLE
Estimated Hold Period 12 months
Estimated First Distribution
*Please carefully review the Disclaimers section below, including regarding Sponsor’s assumptions and target returns
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Overview
Management

Melody Estates LLC

Melody Estates, LLC is a real estate investment firm based in Los Angeles, California. The owner of Melody Estates, Christopher Lim, is also an owner of Catalina Estates LLC and an affiliated brokerage company, Neighborhood Consulting, Inc.

Through his companies, Christopher Lim has focused on identifying properties that could be purchased for a significant discount to market price, rehabbing those properties by performing primarily cosmetic repairs and reselling those properties for significant profits once the repair work was completed.

He has successfully "flipped" several properties with others pending. Completed projects include:

Property Purchase Price Market Price Repair Cost Sale Price ROI
16121 S Harris St. Compton, CA 90221 $115,000 $160,000 $25,000 $242,000 89%
9166 Gregory St. Cypress, CA 90630 $384,200 $550,000 $80,000 $680,000 56%
640 Boxwood Ct. Ontario, CA 91761 $402,000 $625,000 $50,000 $725,000 68%
8489 Hunter Dr. Rancho Cucamonga, CA 91701 $315,000 $480,000 $40,000 $500,000 46%
6231 Friend Ave. Whittier, CA 90601 $370,000 $625,000 $60,000 Pending N/A

 

  • Christopher Lim
Christopher Lim

Christopher Lim is the owner of Melody Estates, LLC and is an owner of Catalina Estates, LLC and the Broker-Owner of Neighborhood Consulting Inc., an affiliated brokerage firm. Chris has demonstrated success in leading Real Estate Investment ventures and firms in order to achieve superior financial returns. His track record includes proven accomplishments leading effective negotiations for property purchases, leading teams to efficiently manage construction projects with aggressive timelines, and successfully negotiating sales of completed properties to ensure timely return on investment.

Christopher has also spent time working as a Realtor, Loan Officer and Account Executive for prestigious firms such as; Prime Realty, Alliance Bancorp, First Magnus, Funded Capital, Americorp Funding, and SDL Financial.

As a residential loan officer, Christopher demonstrated industry knowledge by creating a multi-cultural radio show, School of Mortgages (KLBA) called Escuela De Hipoteca.  This show was intended to educate borrowers to make better decisions when selecting a home loan (2005-2009). 

Given his extensive experience in leadership within real estate, lending, and account management, Christopher has access to key networks and up to date knowledge about current industry trends.  This access helps him to proactively assess and analyze potential investment opportunities to ensure that only ventures with potential are considered.   

While leading Neighborhood Consulting, Christopher demonstrated success in effectively utilizing international networks through the successful closing on the sale of the Holiday Inn Hotel and Suites Anaheim (a $27.5 million deal).

Track Record

Business Plan
Property

At A Glance

Property Type: Residential, Single-Family
Investment Type: Loan Purchase*
Estimated Return: 9% annualized
Loan Term: 12 months
Location: La Canada Flintridge, CA
   
Purchase Price: $950,000
Loan Amount: $965,000*
Current As-Is Appraised Value: $1,565,000
Current Loan to Value: 61.7%

*$15,000 of Expected Fees & Closing Costs are being included in the Loan Amount

Summary

The borrower, Catalina Estates LLC, ​is obtaining a loan for the purpose of a rehab. Catalina Estates LLC is performing renovations on the property and will look to sell as quickly as possible at a higher price than the purchase price. Renovations typically include new paint, new carpet, system, plumbing and electrical upgrades, and general clean up items. Upon completion, the property will look like other renovations Catalina Estates LLC ​has executed. 

Investors will receive interest payments of 9% with a final balloon payment at the end of the loan term. The security interest for the underlying borrower loan is a trust deed secured by the property in first position.*

There is a three (3) month prepayment penalty associated with the loan. Any proceeds received from the prepayment penalty will be paid to the investors. For details on the prepayment penalty see the attached Series Note Listing.

The Borrower is planning to complete roughly $95,000 of renovation work to the property. Realty Mogul Co. will be holding back $70,000 of additional equity investment from the Borrower for this expected renovation work. The $70,000 will be disbursed on an ongoing basis based upon renovation completion.

Risk Factors**

  • Forward-Looking Statements: Investors should not rely on any forward-looking statements made regarding this opportunity, because such statements are inherently uncertain and involve risks. We use words such as “anticipated,” “projected”, “forecasted”, “estimated”, “prospective”, “believes,” “expects,” ”plans” “future” “intends,”, “should,” “can”, “could”, “might”,“potential,” “continue,” “may,” “will,” and similar expressions to identify these forward-looking statements.
  • Market Risk: Investments related to mortgages secured by real estate are subject to market valuation risks that may be caused by changing economic and local market conditions. The property underlying the corresponding borrower loan is expected to have reasonably acceptable loan-to-value ratios and to meet certain other valuation criteria, but estimated values made when the loan is originated may not fully represent current market values, and subsequent market values will in particular be affected by changing economic or local market conditions. Such conditions are beyond the control of Realty Mogul and of the corresponding borrower on this loan. Such conditions may change due to factors such as local real estate market conditions, prevailing interest rates, the rate of unemployment, the level of consumer confidence, the value of the U.S. dollar, energy prices, changes in consumer spending, the number of personal bankruptcies, disruptions in the credit markets and other factors.
  • Credit Risk: The borrower loan is being made with respect to a property that is in need of repairs, a situation that does not generally meet the financing criteria for conventional mortgages from institutional sources. Credit risk is inherent in the mortgage lending industry, and there can be no assurance that the credit worthiness of the borrower will be sufficient to assure the full repayment of the underlying borrower loan.
  • Insurance Risk: The borrower will maintain insurance of the kind that is customarily obtained for similar properties, but is not expected to carry certain disaster-type insurance (covering events of a catastrophic nature, such as earthquakes). In the event that an uninsured disaster should occur to the real property underlying the corresponding borrower loan, or in the event a borrower does not maintain the required insurance and a loss occurs, Realty Mogul could experience difficulty recovering the principal amount of the corresponding borrower loan and any interest due thereon.
  • Illiquid Investment - Transfer Restrictions & No Public Market: The transferability of these securities are restricted by the terms of this offering and by U.S. federal and state securities laws. In general, investors will not be able to sell or transfer their interests. There is also no public market for the securities and none is expected to be available in the future. Persons should not invest if they require any of their investment to be liquid. This is particularly important for persons of retirement age, who should plan carefully to assure that their assets last throughout retirement.

Risk Mitigation**

  • There is a personal guarantee on the underlying borrower loan.*
  • The borrower is a real estate company with a history and a track record of success.
  • The security interest for the underlying borrower loan is a mortgage deed.*
  • The underlying borrower loan is protected by title insurance.*
  • The underlying property is protected by hazard insurance.*
  • Investor returns are not contingent on the appreciation of the property value and investor returns do not increase based on any resale price. The borrower is still obligated to repay the corresponding borrower loan.
  • In a worst case scenario, a foreclosure of the property is possible. Proceeds would be distributed to investors according to the percentage of the total investment opportunity initially funded net of any expenses incurred for the foreclosure proceedings. 

*An investment in this loan will be made through a borrower dependent payment note issued by Realty Mogul. This promissory note is dependent on payments that Realty Mogul receives on the underlying borrower loan. While the underlying borrower loan is secured by legal title on real estate, the borrower dependent payment note is not itself secured nor does it have a personal guarantee. 

**The above is not intended to be a full discussion of all the risks of this investment. Please see the Risk Factors in the Investor Document Package for a discussion of additional risks.

Location

The property is located in La Cañada Flintridge, CA, a small city in Los Angeles County. La Cañada Flintridge is situated in the Crascenta Valley and the far western end of the San Gabriel Valley, 15 miles north of downtown Los Angeles. Reference to the city is commonly shortened to 'La Cañada'.

La Cañada is an affluent community, ranked by Forbes as one of the most expensive U.S. cities to live in. It has a population of approximately 20,600 with a median household income of $145,404 and a median home price greater than $1.3 million. The city has one of the lowest crime rates in Los Angeles County, and the La Cañada Unified School district is regarded as one of the top school districts in the state of California.

La Cañada is the home of NASA's Jet Propulsion Laboratory (JPL). Managed by the California Institute of Technology, JPL is a federally funded research and development center focused in the construction and operation of robotic planetary spacecraft. Other notable destinations in La Cañada include the 150 acre botanical garden Descano Gardens and a unique 23-mile trail system.

The property is located in a suburban neighborhood in La Cañada comprised primarily of single family homes. It is in subpar condition relative to other homes nearby that are of similar age and size, providing for a potentially significant value add opportunity through repairs and cosmetic upgrades. Several of the nearby properties have recently sold at an average price of $1,700,000 in the past 6 months. The property is in close proximity to shopping, schools, and parks. The property is also located within 5 miles of Interstate 210 and California State Route 2, connecting Los Angeles to the northern suburbs.

Pasadena 

La Cañada is bordered to the east by the city of Pasadena. Pasadena is located ten miles northeast of downtown Los Angeles and is the 9th largest city in Los Angeles County with a population of 137,000.

The city is the host of the annual Tournament of Roses Parade and the Rose Bowl football game. Dating back to 1890, the Rose Parade is held each year on January 1 and is attended by over 700,000 spectators and broadcasted to millions via worldwide television. The Rose Bowl football game is held at the Rose Bowl stadium, a National Historic Landmark. The game is America's oldest college football bowl game and attracts nearly 100,000 fans each year.

Pasadena is the home to the California Institute of Technology, Fuller Theological Seminary, Art Center College of Design, the Pasadena Playhouse, the Norton Simon Museum of Art, and the Pacific Asia Museum. Top employers in Pasadena include NASA, Kaiser Permanente, AT&T, and Bank of America.

Glendale

La Cañada's southern border is shared by the city of Glendale. Glendale is located 10 miles north of downtown Los Angeles at the juncture of the San Fernando and San Gabriel Valleys. With a population of 191,000 it is the third largest city in Los Angeles County.

Glendale is the U.S. headquarters of Nestlé, International House of Pancakes, and Americas United Bank. Other top employers include The Walt Disney Company, Public Storage, and Glendale Adventist Medical Center. Glendale contains several upscale shopping centers, such as the Glendale Galleria and the Americana at Brand. 

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