Stockdale TX Land

Blackburne & Sons is pleased to present this new first trust deed secured by 2.29 acres of vacant land in Stockdale, TX.

The purpose of this loan is to pull cash out of the subject property for working capital.

COUNTY INFORMATION

The subject property is located in Wilson, County which is located to the south-east of San Antonio county is part of the San Antonio - New Braunfels Metropolitan Statistical Area (MSA). This MSA is the 24th largest in the country and has a population of 2,641,271. Wilson County itself has a population of 49,753 and its county seat is Floresville. According to the U.S. Census Bureau, the county has a total area of 808 square miles, of which 804 square miles are land and 4.7 square miles (0.6%) are covered by water. Major highways include U.S. Highway 87, U.S. Highway 181 and State Highway 97.

Per DataUsa, the median household income is $80,082, with a median home value of $210,600 and a 9.9% poverty rate (state poverty rate is 14.2%). The economy is relatively balanced, with the most common job being Office & Administrative Support Occupations (3,045 people), Sales & Related Occupations (2,745 people), and Management Occupations (2,553 people). The most common industries are Construction (2,678 people), Retail Trade (2,670 people), and Health Care & Social Assistance (2,521 people).

CITY INFORMATION

Stockdale is a small town located at the intersection of US 87 and Texas 123, about 40 miles southeast of San Antonio and 25 miles south of Seguin. Stockdale is the home of the annual Watermelon Jubilee, one of the oldest watermelon festivals in Texas. The City of Stockdale is served by the Stockdale Independent School District and home to the Stockdale High School Brahmas. The city enjoys all the advantages of life in a small town, yet is still less than an hour drive from one of the largest cities in the country.

Institutions of higher learning in close proximity include: Texas Lutheran University in Seguin, Texas State University in San Marcos, Coastal Bend College in Beeville and several colleges and universities in San Antonio.

Stockdale, TX has a population of 1,413 and is part of the San Antonio Metropolitan Statistical Area. It is 41 miles southeast of San Antonio. Per DataUsa, Stockdale's median household income is $65,903, the median property value is $112,000 and the poverty rate is 15.9%. Between 2019 to 2020 the population grew from 1,269 to 1,353. The economy of stockdale employs 518 people, with the largest industries being education (85), manufacturing (70) and healthcare and social assistance (53).

SUBJECT PROPERTY DETAILS

The property is a 2.29 acre parcel and sits at the intersection between Texas Highway 123 and US Highway 87. The neighboring area is primarily a mix of commercial, retail and industrial properties. To the north of the property is a hotel, and directly across Highway 123 (to the west) is a Dairy Queen, convenience store and another hotel. To the south, across Highway 87 is a shell gas station. There are no zoning restrictions on the property, and it has the standard utility easements. Currently, there are no plans to develop this site.

BORROWER SUMMARY

Our borrower is a single man, who will be holding title to the property personally. The borrower's personal tax returns report income of $155,406 in 2021 and $138,587 in 2020. He has a mid-credit score of 664, with a stated net worth is $4,981,742. He is currently the CEO of a company that specializes in robotic and AI-driven care for seniors. The borrower came into possession of the property in an atypical manner. Our borrower acquired majority share of another partnership that had previously owned the property. This partnership had originally purchased the property back in 2007, for roughly $100k-$150k. In order to provide a clean chain of title, the property will be transferred into the borrower's name personally prior to closing.

The purpose of the loan will be to pull cash out for working capital for his other businesses. The borrower plans to either sell the property or refinance to exit our loan. Our loan will include a 12-month payment reserve.

VALUATION SUMMARY

We engaged a local MAI appraiser who valued this property at $500,000. We also engaged two local brokers who performed opinions of value. They valued this property at $90,000 and $317,500.

At an 9.0% yield to the investors and a 35.0% LTV (Appraisal) , 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.

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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