Friday, May 22, 2020

LA property in the Eagle Rock neighborhood approved for 17 new homes

In August 2018, online investment platform Fundrise (a Real Estate Investment Trust) provided a $3.1 million loan for the acquisition of a 26,500 square foot (0.6 acre) property in the Eagle Rock neighborhood of Los Angeles, Calif. While the property is currently improved with two office buildings and a parking lot, the borrower acquired the site with plans to redevelop the land into a new housing subdivision.

On Friday, Fundrise reported that the borrower has successfully secured entitlements from the City of Los Angeles to subdivide the property into 17 smaller lots, upon each of which a new home can now be built. The now-entitled property is valued at approximately $4.2 million, based on a third-party appraisal, which is roughly 34 percent higher than the original $3.1 million purchase.

“The next step is to secure the building permits necessary to break ground,” Fundrise said in an update to investors. “At that point, the borrower plans to either refinance into a construction loan or sell the property to a home builder to pay back our investment.”

Fundrise, based in Washington, D.C., has been labeled as the first company to successfully crowdfund investment into the real estate market.

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