Why would a borrower take a second deed of trust loan instead of refinancing the first?

A second deed of trust loan lets a borrower access additional funds quickly without disturbing an existing, often favorably priced, first mortgage, avoiding the cost and delay of a full refinance. This loan was secured by a second deed of trust, leaving the borrower's senior lien untouched.

What makes a short-term private loan close faster than a bank loan?

A private lender underwrites primarily against the property's equity and a defined exit rather than a full institutional credit and income review, which lets it fund in days instead of the weeks or months a bank requires. This loan closed on a six-month term with a straightforward interest-only structure.

How does a points-based extension option work on a short-term note?

A points-based extension option lets the borrower push the maturity date out by paying an upfront fee calculated as a percentage of the loan balance, giving flexibility if the exit takes longer than expected without renegotiating the entire loan. This note allowed a three-month extension at a cost of five points, requested in writing before a set deadline.

Why does a private note require monthly statements from the senior lienholder?

When a loan sits behind another lien, the junior lender needs ongoing visibility into whether the senior loan is current, since a default on the senior position could jeopardize the junior lender's collateral. This note required the borrower to provide a copy of the senior lender's monthly statement by the 15th of each month.

Case Study: $200K Private Bridge Loan on a Non-Owner-Occupied Property in Los Angeles

Deal at a Glance

Loan Amount	$200,000
Property	Non-owner-occupied commercial property, second lien position
Location	Los Angeles, California
Transaction	Short-term private bridge loan
Rate	20.00% fixed, interest-only
Monthly Payment	$3,333.33
Term	6 months, with a 5-point extension option
Prepayment	Open, no fee or refund adjustment
Guaranty	Continuing guaranty from the borrowing entity's principal
Collateral	Second deed of trust behind an existing senior lien
Closed	December 2023

The Deal That Walked in the Door

We are Commercial Lending Solutions, a commercial mortgage brokerage based in Los Angeles, and this deal brought us a borrower who needed a small, fast infusion of capital secured against a non-owner-occupied property they already held, without touching the existing first mortgage on the asset. There wasn't time for a bank underwrite, and the borrower needed certainty of funding over the lowest possible rate.

Structuring a short-term second-position loan behind an existing senior lien meant underwriting the combined loan-to-value across both liens and building in protections that kept our position current on the senior loan's status throughout the term.

Commercial Lending Solutions specializes in private bridge loans and short-term second-position financing for property owners across Los Angeles, CA and the surrounding Southern California market.

What Made It Hard

A tight closing timeline. With the borrower needing funds quickly and no time for a full institutional underwrite, the loan had to be documented and funded in a matter of days rather than the weeks a bank refinance would require.
Junior-lien monitoring requirements. Sitting behind an existing senior lien meant building in an ongoing requirement for the borrower to provide the senior lender's monthly statement, so any developing default on the first position wouldn't go unnoticed.
Balancing a short term against a real exit. With a six-month maturity and only a five-point extension option beyond that, the borrower needed a credible plan to refinance or sell within the window, or absorb a real cost to buy more time.

How We Ran the Process

Trevor Damyan, a California-licensed real estate broker (CA DRE #02244836), closed this loan directly as a private money funding source, with the note dated December 20, 2023:

$200,000 secured by a second deed of trust on the Los Angeles property, behind the borrower's existing senior lien
20.00% fixed interest, calculated on a 365-day year, with interest-only monthly payments of $3,333.33 beginning February 1, 2024
A six-month term, with the full unpaid principal and accrued interest due by June 30, 2024
An optional three-month extension to September 1, 2024, available at a cost of five points, requested in writing by May 1, 2024
Open prepayment at any time, with no refund of costs, fees, interest, or points already paid
A requirement that the borrower supply the senior lender's monthly statement by the 15th of each month, keeping the loan's junior position monitored throughout the term
A continuing personal guaranty from the borrowing entity's principal

The loan funded within days of the borrower's request, giving them the short-term liquidity they needed against their existing property without disturbing the senior financing already in place.

"When a borrower needs certainty over the lowest possible rate, speed is the product. Closing this in days, not weeks, is exactly why private capital exists."
, Trevor Damyan, Commercial Lending Solutions

Why We Won This One

Being able to move directly on this loan, without routing it through a separate institutional underwrite, is what let this borrower get funded on a timeline no bank could match. Structuring the deal as a clean second position with straightforward interest-only payments kept the documentation simple enough to close in days rather than weeks.

Building the senior-lien monitoring requirement into the note from the outset, rather than treating it as an afterthought, gave real protection on a junior position without adding friction to the borrower's monthly obligations.

Is This Structure Right for Your Deal?

If you need short-term capital secured against a property you already own, without disturbing your existing first mortgage, we can help you move quickly. We arrange bridge loans and owner-occupied commercial loans from a network of more than 1,000 capital sources.

Apply for financing or call us at 310.708.0690 to talk through your timeline.

This is one of 32 closings we have arranged in Los Angeles County. Read about how we work as a Los Angeles commercial mortgage broker, see our Los Angeles bridge loans, or browse all 46 California closed deals.

Trevor Damyan

Commercial Mortgage Broker, Commercial Lending Solutions | CA DRE 02244836

Trevor Damyan is a commercial mortgage broker at Commercial Lending Solutions with a background in structured finance at CBRE and Marcus and Millichap Capital Corporation. He specializes in bridge loans, construction financing, SBA programs, DSCR loans, and complex capital structures for investors and developers across all 50 states.

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