Goshen NY Restaurant Purchase

George says: "What a beautiful property! We rarely get to lend on properties this nice. In addition, this is a purchase money transaction, where the value of the property has been established in the open market, as opposed to merely by some appraiser’s opinion. There are troublesome economic times. Now is the time to flee to less risky deals."

Blackburne & Sons is pleased to present this purchase money First Mortgage secured by a 1,108SF stand-alone restaurant building on a 0.232-acre lot, located in Goshen, Orange County, New York.

The purpose of loan is to purchase the subject property in the amount of $525,000. The borrower will be bringing roughly $183,000 cash down, not including closing costs.

Orange County is located in the U.S. state of New York. As of the 2020 United States census, the population was 401,310. This county was first created in 1683 and reorganized with its present boundaries in 1798. The county is part of the Hudson Valley region of the state and its county seat is Goshen. Orange County is part of the Kiryas Joel-Poughkeepsie-Newburgh metropolitan statistical area, which belongs to the larger New York–Newark–Bridgeport, NY–NJ–CT–PA Combined Statistical Area. As of the 2010 census the center of population of the state of New York was located in Orange County, approximately 3 mi (4.8 km) west of the hamlet of Westbrookville.

According to the U.S. Census Bureau, the county has a total area of 839 square miles, of which 812 square miles is land and 27 square miles (3.2%) are water. Orange County is in southeastern New York State, directly north of the New Jersey-New York border, west of the Hudson River, east of the Delaware River and northwest of New York City. It borders the New York counties of Dutchess, Putnam, Rockland, Sullivan, Ulster, and Westchester, as well as Passaic and Sussex counties in New Jersey and Pike County in Pennsylvania. Orange County is where the Great Valley of the Appalachians finally opens up and ends. The western corner is set off by the Shawangunk Ridge. The area along the Rockland County border (within Harriman and Bear Mountain state parks) and south of Newburgh is part of the Hudson Highlands. The land in between is the valley of the Wallkill River. In the southern portion of the county the Wallkill valley expands into a wide glacial lake bed known as the Black Dirt Region for its fertility.

CITY INFORMATION

Goshen is a town in Orange County, New York, United States. The population was 14,571 at the 2020 census. The town is named after the Biblical Land of Goshen. It contains a village also called Goshen, which is the county seat of Orange County. The town is centrally located in the county. Goshen is the home of the Harness Racing Museum & Hall of Fame, and hosted harness racing's top event, the Hambletonian, from 1930 to 1956, at the former Good Time Park. Racing is still held at the Historic Track, a National Historic Landmark in the center of the village.

In 2023, the median property value in Goshen, NY was $383,100, with a homeownership rate of 66.4% and the median household income was $99,464. The economy of Goshen, NY employs 2.7k people. The largest industries in Goshen, NY are Educational Services (453 people), Retail Trade (349 people), and Health Care & Social Assistance (343 people), and the highest paying industries are Real Estate & Rental & Leasing ($170,096), Wholesale Trade ($143,295), and Professional, Scientific, & Technical Services ($127,639). The largest universities in Goshen, NY are Orange Ulster BOCES-Practical Nursing Program (417992) (47 degrees awarded in 2022).

The subject property consists of a single parcel that is 0.232-acres in size, rectangular in shape and generally level in topography. The site is located in a village of commercial and residential, north of New York City. The subject is immediately surrounded by a multi-family complex to the north, a single-family residence to the west, a 9,890 square foot retail building to the east and a 6,800 square foot mixed-use (retail/apartment) building to the south. It is equipped with all public utilities, a drive through and eight parking spaces.

The site is improved with a 1,108SF building, which was originally built in 1980 as a bank. It was then converted to a restaurant in 2020, per the appraiser. It consists of a single story, class C construction building with a 4” concrete slab foundation and a flat roof with a rubber membrane covering. The interior consists of a seating area, ordering counter, kitchen area and bathroom.

The property is currently vacant; however, it should be noted that the borrowers have a prospective tenant who will pay $7,000 per month. The prospective lease will begin once the borrower takes ownership of the property, and will expire in February of 2027. It should be noted there used to be underground storage tanks, but they were removed years ago. A clean Phase 1 environmental report will be provided in the due diligence package.

BORROWER SUMMARY

Our borrower is limited liability company, of which our guarantors are 100% owners. The LLC is a newly formed real estate holding entity and has not yet reported any income. Guarantor #1 is the 99% owner, and his sister Guarantor #2 is a 1% owner.

Guarantor #1 is a single man who works as the manager and owner of a Mexican restaurant. He self-reported a net worth of $1,294,126 and has a mid-credit score of 745. His tax returns show an adjusted gross income of $19,658 in 2023 and $2,000 in 2022. He will be providing a personal guarantee on this loan.

Guarantor #2 is a single woman who works as the assistant manager and owner of a Mexican restaurant. She self-reported a net worth of ($35,990) and has a mid-credit score of 684. Her tax returns show an adjusted gross income of $1,900 in 2023 and $6,350 in 2022. She will be providing a personal guarantee on this loan.

The borrowers also own a Mexican restaurant that is loacted at a different property. The entity that runs this restaurant will also be providing a guarantee on our loan. This entity reports its income through the borrowers’ personal tax returns and therefore does not file its own. We were provided profit & loss statements which show a net income of $92,126.85 for 2025 (January - March) and $52,696.75 for 2024. The borrowers have owned and operated this restaurant for over 10 years. It should be noted that the down payment for the purchase of the subject property will come from 10 years worth of savings.

We hired an MAI appraiser who valued this property at $530,000 (AS-IS). We also hired a broker who performed a drive-by opinion of value (BPO) and valued this property at $285,000.

At a 10.0% yield to investors and a 64.4% LTV (AS-IS) appraised value and 65.0% LTV (Purchase Price), 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.

ACCREDITATION STANDARDS

Please note this offering is a SEC Regulation D filing and will be done through a Private Placement Memorandum. In order to invest, you must be an accredited investor. Generally speaking, an accredited investor is an individual:

(a) whose individual income exceeds $200,000 in each of the past two years, with reasonable expectation of reaching the same going forward OR
(b) whose joint income with spouse exceeds $300,000 in each of the past two years OR
(c) your NET WORTH exceeds $1,000,000 (exclusive of your primary residence) OR

If you plan on investing through an entity, the entity can qualify if ANY of the following are met:

(a) all equity owners must be accredited OR
(b) any trust with more than $5,000,000 in assets OR
(c) ERISA with either $5,000,000 in assets OR a bank, insurance company, or registered investment advisor as it's trustee OR
(d) any self directed ERISA with an accredited investor(s) making the business decisions OR
(e) an IRA owned by an accredited investor

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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