Junior Liens- From the desk of Massey Kouhssari

Post date: May 11, 2011 6:19:44 PM

I have decided to write more Junior liens since they are not inherently riskier than senior debt when carefully crafted.  This is a good space to enter so please look at extending these loans as alternatives to refinancing the entire senior debts...   Here are some FAQ's having to do with JUNIOR LIENS:


Q.  Can you really do a THIRD TRUST DEED or is this just a marketing ploy?

A.  While lien position is important, sometimes it makes more sense for the borrower to do a small baby junior loan, so Yes...I will do third trust deeds.  I am still very interested in WHO I am behind, the character of the senior debt, the features of the 1st and 2nd loans and of course, the combined loan to value.  And yeah, I guess it is kind of a marketing strategy since I want to develop this space with all of you wonderful peeps. 


Q.  Why now?  Nobody is lending money let alone second trust deeds?

A.  We have always lent our money as second and third trust deeds.  Our bank of knowledge is high.  We are using this intellegence to re-enter this tricky market.


Q.  What's max LTV?

A.  No more than 60%.  Prefer max 55%.


Q.  Are you OK with No Cal?

A.  More or less.  Don't mind central valley farm areas and FARMS.


Q.  Who made you an authority on second TD lending?

A.  Members of the BankerBroker Investment Partners 


Q.  How many points can the borrower expect to pay on a $200,000 second TD?

A.  Between 4-6 points


Q.  Do you require a personal guarantee?

A.  With rare exception, Yes...


Q.  Should I send a full packet, all of the exhibits, LOE, prelim and a set up sheet?

A.  A telephone conversation first.  I will underwritie over the phone.  Fast and furious, not so much warm and fuzzy on the first few calls. 


Q.  Can you do a $300,000 second TD behind a $3mm first trust deed?

A.  Yes.  LTV is Queen.


Q.  As an avid reader of your finance blog I see that you arrange and structure very interesting pieces.  How can you do that?

A.  I want to be in spaces that others have neglected or have not discovered.  Generally speaking, we extend debt to your borrowers when others do not.


Q.  What are your rates?

A.  Depending on the asset class, LTV, and other secret recipe items it ranges from 11.000% - 15.000%


Q.  Are these rates the same for lines of credit?

A.  Don't do lines of credit.


Q.  What are your loan sizes for second trust deeds?

A.  I am very flexible...I can go as low as $100k and up to $1mm


Q.  Do you have pre pay penalties?

A.  No.


Q.  How fast  can you close a Hermosa Beach second TD with a loan to value of 60%?

A.  72 hours


Q.  Really?

A.  Yes.


Q.  Can I use my own apprasier or get a BPO?

A.  I am pretty flexable, unless the asset is a gas station/car wash/recylcing center or located in BH, Brentwood, Hollywood Hills, PP or Malibu.


Q.  Are you OK with writing loans for assited living, convelescent homes, senior care facilities or health care facilities?

 A.  Very much so.  I am eager to look at all scenarios.  Very,  very interested in structuring debt for these types of facilities?


Q.  If I find a one-off second trust deed and note for sale will you consider buying the note?

A.  Yes and I will make sure that you are paid nicely for the referral.  I will purchase, hold and service both FIRST and SECONDS...  





Office (classes a-b)


Commercial retail

Car wash/laundrymats/fuel stations

Hospitality/Recreational (golf courses, hotels, amusement parks, arcades)

Board and Care/Senior Living/Covelescent

1-4 Residential (more robust underwriting)

Any real estate asset in escrow

Farms (all counties)


Massey Kouhssari 949-607-8808