Hillsborough Golf Course

Blackburne & Sons is pleased to present this first Trust Deed secured by 9-hole public golf course, 5,694 SF clubhouse/restaurant, and 1,800 SF pro-shop/maintenance building on a 33.10-acre parcel located in Hillsborough, Hillsborough County, New Hampshire.

The borrowers will be using our loan to pay off their short term existing loan of approximately $300,000 that has matured, pay closing costs, and pay themselves back for funds used for renovations to the property.

Hillsborough County is the most populous county in the U.S. State of New Hampshire. In 2020, Hillsborough County, NH had a population of 415,000 people with a median age of 40.8 and a median household income of $82,099. Between 2019 and 2020 the population of Hillsborough County grew from 413,035 to 415,305, a 0.55% increase and its median household income grew from $81,460 to $82,099, a 0.784% increase. The county seat of county are Manchester and Nashua, the state’s two biggest cities. Hillsborough County is northern New England’s most populous county as well as its most densely populated. Hillsborough County comprises the Manchester-Nashua, NH Metropolitan Statistical Area, which in turn constitutes a portion of the Boston-Worcester-Providence, MA-RI-NH-CT combined Statistical Area.

Hillsborough County was one of the five original counties identified for New Hampshire in 1769, and was named for Wills Hill, 1^st Earl of Hillsborough, who was British Secretary of State for the Colonies at the time. The county was formally organized at Amherst on March 19, 1771. According to the U.S. Census Bureau, the county has a total area of 892 square miles, of which 876 square miles is land and 16 square miles is water. The highest point in Hillsborough County is Pack Monadnock Mountain at 2,290 feet.

The largest universities in Hillsborough County are Saint Anselm College (585 degrees awarded in 2020), River University (549 degrees), and Manchester Community College (461 degrees). The economy of the county employs 229,000 people. The largest industries in Hillsborough County are Health Care & Social Assistance (32,749 people), Manufacturing (32,584 people), and Retail Trade (29,494 people). The highest paying industries are Professional, Scientific, & Technical Services ($79,180), Utilities ($76,894), and Finance & Insurance ($70,705).

Hillsborough, frequently spelled Hillsboro, is a town in Hillsborough County, New Hampshire. In 2020, the city of Hillsborough had a population of 1,420 people with a median age of 42.8 and a median household income of $72,875. Between 2019 and 2020 the population of Hillsborough declined from 1,716 to 1,421, a -17.2% decrease. The median household income grew from $70,943 to $72,875, a 2.72% increase. The economy of the city employs 721 people. The largest industries are Manufacturing (193 people), Retail Trade (148 people), and Health Care & Social Assistance (134 people). The highest paying industries are Finance & Insurance & Real Estate & Rental & Leasing ($71,362), ad Manufacturing ($62,806).

The city is home to Fox State Forest and part of Low State Forest. According to the United States Census Bureau, the city has a total area of 44.7 square miles, of which 43.7 square miles are land and 1.0 square mile are water, comprising 2.24% of the city. The town center, or census-designated place, has a total area of 1.9 square miles.

The subject property is an open to the public 9-hole golf course, which offers annual memberships. The golf course was designed by architect Ed Bedell and opened for play in 1961. The course is open during the summer session from April through October. Although the golf course is closed during the winter, the restaurant remains open year around. The Golf Pass/Golf Advisor website currently shows the 9-hole public golf course at 2,319 yards with a course rating of 31.5 and a slope rating of 101. The golf course is considered to be shorter in lengths and slightly below average in difficulty.

The main golf building / restaurant constructed circa 1940 with 3,564SF of above grade living area, 1,680SF of basement area, and 450SF of porch/patio area. The detached pro shop and maintenance barn is a 1-story wood frame building on a concrete slab. This building is not shown on the property card and measured 1,800SF. The building features a small pro shop/golf check in area and maintenance shop with 3 roll up garage bays.

The subject property is located on the south side of Main Street which is the primary commercial avenue running through the town of Hillsborough. The town of Hillsborough is in southern New Hampshire west of Interstate 93 and northwest of the Boston metro market.

Our borrower’s purchased the subject property in November 2021 for $700,000 cash, then spent an additional $530,000 on renovations to the property. The property had been family owned and operated since 1965 prior to our borrower’s purchase.

The clubhouse was just recently re-opened after a complete renovation, adding a full restaurant including a wrap-around porch, indoor golf simulators, and bar area. The bar and restaurant can seat 100 people inside with an additional 70 people on the porch.

The borrowers hold title through an LLC, which is the real estate holding company. There are four members, each owning 25% of the LLC, all of which are providing personal guarantees. Their wives will not be on this loan.

The borrower provided the 2020 tax return from the seller, which shows net income of $13,911, however if you add back depreciation of $7,361, the net income was $21,272. We also received the 2021 tax return that our borrower filed for the subject, however there was no income in 2021. It shows a loss of $6,832, which was for expenses. We were provided a 2022 P&L which shows a loss of $508,071, however that P&L includes $577,806 in funds spent on the capital improvements, and $93,604 in mortgage payments. Adding those two back in would net $163,339 for 2022.

Guarantor #1 is a married man. He is a Lean Six Certified Project Management Professional (PMP) and a Certified Associate of Property Management (CAPM), reports a net worth of $609,950 and has a mid-credit score of 681. His personal tax returns for 2021 reported an adjusted gross income of $42,553 and in 2020 they reported $102,579 in adjusted gross income.

Guarantor #2 is a married man. He is an International Brotherhood of Electrical Workers journeyman lineman; he has been in the outside line construction industry since 2010. He reports a net worth of $1,078,740 and has a mid-credit score of 753. His joint tax returns for 2021 reported $36,852 in adjusted gross income and in 2020 they reported an adjusted gross income of $55,885.

Guarantor #3 is a married man. He has been a federal employee for 10 years, is an Army veteran, and a member of a real estate holding and investment company. He reports a net worth of $513,246 and has a mid-credit score of 753. His personal tax returns for 2021 reported a loss of ($20,356) in adjusted gross income and in 2020 they reported a loss of ($36,433) in adjusted gross income.

Guarantor #4 is a single man. He is the manager of operations for all entities with a background in finance. He reported a net worth of $478,250 and has a mid-credit score of 742. His personal tax return for 2021 reported a loss of ($38,521) in adjusted gross income and in 2020 they reported an adjusted gross income of $21,192.

We hired a local MAI appraiser who valued this property (AS-IS) appraised value of $1,280,000. A local broker was also engaged who performed a drive-by opinion of value (BPO) who values this property at $975,000-$1,000,000.

At an 11.0% yield to the investors and a 41.02% LTV (AS-IS) Appraised Value, this appears to be a reasonable investment. Investing in any first trust deed 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. Foreclosed commercial properties almost always need to be renovated before they can be leased or sold, so be sure to maintain some liquidity.

You should spread your mortgage investment portfolio out among lots of different deals. If you have $300,000 to invest, you should invest $10,000 to $20,000 in 15 to 20 different fractionalized first trust deeds. For example, if the deal is a $300,000 first trust deed on an office building in Boise, with a $15,000 investment you would own 5% of the loan. By spreading your money out into a bunch of different deals, you are achieving the diversity of a fund without the failed fund sponsor problem. If you are extremely wealthy, you could double (or even triple) my suggested investment amounts, but be careful about pouring too much money into a single deal. We once had a whole building fall into an old coal mine. Ouch.
Be wise and resist investing in any first trust deed yielding more than 9%. I would personally never invest in a first trust deed with a double-digit yield. The payments slowly grind the borrowers into the dust.
Blackburne’s Law theorizes that a portfolio of 8% and 9% first trust deeds will outperform a portfolio of 11% and 12% first trust deeds over a seven-year term. Only our wisest (and eventually the happiest) investors listen to me.
You can also buy some of our smaller deals in their entirety, but I only recommend this if you are richer than Crassus.
It is very easy to lose money in hard money first mortgages, so fight-fight-fight against the temptation to invest in high-yield deals. As Nancy Reagan used to say, “Just say no.” But if you choose 7% to 9% first mortgages, I predict that you will be very, very pleased.
During the S&L Crisis, commercial real estate fell by 45%. Within three years, values reached new highs. During the Dot-Com Meltdown, commercial real estate fell by 45%. Within three years, values reached new highs. During the Great Recession, commercial real estate fell by 45%. Within three years, values reached new highs. Some time in the next decade, we will have another opportunity to snatch up prime commercial real estate at a huge discount. You will be terrified, but when Blackburne and Sons invites you to join a syndicate to buy a nice commercial property at a 35% discount off its prior high, just remember that the best time to invest is when blood is running in the streets. Why not when real estate has fallen by 45%? You’ll never catch the very bottom because historically the bounces off the bottom happen much too fast. Bounce-soar. You will be terrified, but just remember that the best time to invest is when blood is running in the streets.

Blackburne & Sons Realty Capital Corporation--For more information, contact Tom Blackburne
555 University Ave., Suite 150, Sacramento, CA 95825
Telephone: (916) 338-3232 * Fax: (916) 338-2328
Real Estate Broker -- California Department of Real Estate -- License Number 829677 -- NMLS Number 103430
Publicly advertised to California residents only under California Department of Business Oversight business plan permit.
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