We Have Raised the Rate By 1%, and George Now Likes the Deal a Lot
$251,500 REMAINING!
![]() |
||||||||||||||||||||||||||||
Exhibit B -- Specifics of the Loan |
Non-California Residents |
|||||||||||||||||||||||||||
Loan Number: N2496
|
||||||||||||||||||||||||||||
PROPERTY Project: Miami Gardens Warehouse Condominium | TERMS
*Net of servicing
|
|||||||||||||||||||||||||||
EQUITY ANALYSIS
|
||||||||||||||||||||||||||||
OPERATING STATEMENT
|
||||||||||||||||||||||||||||
BORROWERS
|
||||||||||||||||||||||||||||
MIAMI GARDENS WAREHOUSE CONDOMINIUM George says,"I have just figured out that I like this loan a lot. It is now a whopping 9% loan (we just increased the rate by 1%) to a CPA with a good income and a mid-credit score of 772. Over the years I have made it clear that I hate church deals. My initial opinion of this deal was therefore pretty lukewarm. Actual church buildings are difficult to sell and and near-impossible to lease. I also missed the fact that our borrower makes a handsome income outside of the church. My staff, however, has reminded me that our borrower has a good income outside of the church and that collateral is a nice industrial condominium. The good thing about industrial condominiums is that the exterior of the building and the grounds are maintained by the condominium association. At this 1% higher rate, I now think this loan is an excellent risk-return tradeoff." Blackburne & Sons is pleased to present this new first mortgage secured by 4,920SF, one-story office/warehouse condominium located in Miami Gardens, Florida. Borrower is a CPA with a 772 mid-credit score. The purpose of this loan is to pay in full the matured loan secured by the subject property. More details on borrower and property below. Miami-Dade County is in the south-eastern most part of the U.S. state of Florida. According to the 2017 census report, the county had a population of 2,751,796, making it the most populous county in Florida and the seventh-most populous county in the United States. It is also Florida's third largest county in terms of land area, with 1,946 square miles. The county seat is Miami, which is the principal city in South Florida. This county is one of the three counties in South Florida that make up the Miami metropolitan area, home to an estimated 6,158,824 people in 2017, as well 34 incorporated cities and many unincorporated areas. The northern, central and eastern portions of the county are heavily urbanized with many high-rise buildings along the coastline, including South Florida's central business district, Downtown Miami. The subject property is located in the City of Miami Gardens. With a population of 111,875, this city encompasses a total of approximately 22 square miles and is considered a blue-collar, middle class community. The Dolphins Stadium (recently renovated in 2016) and Calder Race Track are located here. Florida Memorial University also call Miami Gardens home, with 1,600 students and aviation as its centerpiece. This university is one of the nation’s only Cessna training center. As for the neighborhood surrounding the subject property, the character of the neighborhood is light-industrial in nature, considered average quality and in the redevelopment stage. Growth at this time is reportedly slow, with fair development potential due to the lack of vacant developable land. The Miami Gardens Police Department headquarters is located in the Sunshine State Industrial Park, three miles east of the subject site. Common property types surrounding the subject are warehouses, light manufacturing plants, cold storage plants, and combination wholesale/retail warehouses and office warehouses built between 1957 and 1985. The subject property itself is located in an industrial complex that consists of three adjacent, one story, office / warehouse condominium buildings; total square foot of buildings is 95,717SF. The buildings were constructed in 1979, then converted from a rental warehouse to industrial condominiums in March of 2007. The land-to-building ratio for the subject property is 2.46 to 1. There are a total of 16 units of various sizes; units range from bare shells with no build-out, to 38% build-out. The buildings have recently been painted and have new decorative overhang entries. Each unit has at least one overhead loading door and a pedestrian door. The units have a clear ceiling height which averages 18’ to the bottom of the twin-T extrusion. Each unit has at least one restroom and the buildings are equipped with fire sprinklers. The security of this loan will be one 4,920SF condominium, of which 907SF is office space. The office space has vinyl tile and carpeted floors, painted drywall, acoustic ceilings with recessed fluorescent lighting and central air conditioning. Two restrooms are located at the east end of the office area. The office space includes a waiting room, reception area and two private offices. The warehouse area is air conditioned, with exposed flexible duct work. The subject has two overhead loading doors and a clear ceiling height of 19’ to the bottom of the twin-t extrusion. The subject is considered to be in average condition for the area, with no recommended repairs noted. Presently, the subject property is owned by Herald of Harvest Ministries Apostolic Faith Incorporated. This church was operated by the borrower’s father, who purchased the subject in November of 2007 for $680,000. After the passing of the borrower’s father in 2014, our borrower took over operations. The church filed for Chapter 11 bankruptcy protection in 2016 to avoid foreclosure due to the Note’s maturity, and inability to obtain new financing. The bankruptcy was dismissed on April 30, 2019 to allow for the borrower to take title to the property personally, and pay off the existing Note that has matured. The church will remain as a tenant in the property after transfer of title. Our borrower now runs the ministry, which reported a 2018 net income of $28,012 and $20,212 for 2017 after adding back mortgage interest. The church will be leasing back the property for a monthly rental rate of $3,046 NNN. Our borrower is a married man, who will be holding title to the property as an individual. He has a mid-credit score of 772, with a stated net worth is $846,510. Taxable income for 2017 and 2016 was $119,766 and $114,038, respectively, all from his employment as a supervising CPA at Kaufman Rossin (CPA firm). His wife will not be on title due to poor credit and that she is a full-time student. We engaged a local MAI appraiser who valued this property at $640,000. We also engaged a local broker who performed an opinion of value, and valued this property at $435,000. At an 9.0% yield to the investors and a 55.0% LTV, this appears to be a reasonable investment. Investing in any first mortgage involves substantial risk, so be sure to read the Risk Factors section of the Offering Circular carefully before investing. A large and prolonged decline in real estate values is possible. Be sure to read the Risk Factors section of the Offering Circular carefully before investing. Foreclosed commercial properties almost always need to be renovated before they can be leased or sold, so be sure to maintain some liquidity. George’s Advice For Successful First Mortgage Investing
Blackburne & Sons Realty Capital Corporation--For more information, contact Angela Vannucci
|