Acquisition and renovation loan, West Hollywood: 8-unit condo building
New construction in a supply-constrained submarket rarely comes to market at a discount, but when a developer default forces a lender to take back a nearly finished building, the right buyer can step into a position that took years and millions to create. We provided a $5,950,000 acquisition and renovation loan in West Hollywood to finance the purchase and ADU buildout of a newly completed eight-unit condominium building on Fairfax Avenue.
Project at a glance
Asset type – Multifamily residential — condominiums
Loan type – Acquisition and renovation loan
Loan amount – $5,950,000
Total project cost – $7,250,000
As-completed value – $8,575,000
LTC – 82%
LTV – 69%
The starting point
The building at 1236 N. Fairfax received its certificate of occupancy in January 2025 — nearly eight years after it broke ground, delayed by COVID and an overextended original developer whose lender ultimately foreclosed. Seven vacant condo units ranging from 1,010 to 1,519 sq. ft. were ready to lease, and an existing storage room was flagged for conversion into a 425 sq. ft. ADU. The asset was brand new. The opportunity was priced like a distressed one.
The investor's approach
An experienced Los Angeles-based real estate investor and general contractor with 19 completed projects over 15 years, with exits averaging approximately 55% above total project cost. This investor came to this project with an unusual edge: having been brought in by the existing lender to finish construction and verify the work already done. That hands-on involvement provided a level of asset-specific knowledge few buyers could match, and positioned this investor to negotiate a purchase price that reflects the lender's basis — not the building's completed market value. The plan is to build out the ADU, lease all eight units and refinance into permanent financing for a long-term hold.
What we look for in projects like this
Experienced operators who know the asset. This real estate investor had spent over a year working on the building before purchasing it. That track record of hands-on involvement is exactly the kind of experience that we can work with.
New or near-new construction in supply-constrained markets. West Hollywood's limited developable land and strong rental demand support underlying value even in a soft cycle. We're comfortable lending against well-located new construction when the numbers are conservative.
A clear refinance exit at a loan amount the market can support. At 69% LTV against a $8,575,000 as-completed value, there's meaningful room for this investor to refinance into conventional or agency financing. We underwrite to the exit, not just the collateral.
Work with us
The real estate investors we work with repeatedly tend to bring us projects where they have a genuine edge — market knowledge, construction expertise or an asset relationship that predates the financing conversation. That combination is what made this a project we are able to fund. If you feel that you have a market edge, get in touch, contact us today.