Waverly

We almost never do second trust deed loans. The risk math rarely works. But when a deal doesn't fit the typical mold, the question isn't whether it fits. It's whether we understand it deeply enough to price the risk correctly. That requires being on site, not behind a desk.

The borrower was a general contractor who'd built homes for some of entertainment's biggest names, including Paul McCartney's residence. He'd purchased a Bird Rock cul-de-sac lot with panoramic Pacific views, secured a low-rate $2 million first trust deed, and had the 8,000-square-foot framing already standing. He needed $2.2 million in second position to fund the finishes.

We drove out, walked every inch of that framing, and talked to him for two hours about his build plan, his materials, his timeline. This wasn't a spec house being run by a project manager. This was a craftsman building a legacy home with his own hands. We could see it in the framing quality, the structural choices, the way he talked about sightlines and natural light. We committed on the spot.

Because our capital was now the collateral at risk, we stayed close throughout construction. We monitored draw schedules, visited the site as finishes went in, and watched our initial $9 million valuation climb as the quality of the build became undeniable. By the time it listed, we were confident this was a $15 million home.

It sold for $15 million, one of the highest prices Bird Rock has ever seen. Our $2.2 million second-position loan was paid off in full. The deal worked because we did what institutional lenders won't: drove out, assessed the builder's capability in person, and made a conviction call. That's the advantage of being local.