Class Act Showbar Gentlemen's Club

George says: "Over the years, we have enjoyed great success making loans on nudie bars. (Careful, past performance is no guarantee of future results.) Boys seem to enjoy looking at pretty girls."

Blackburne & Sons is pleased to present this First Mortgage secured by a 2,858SF gentlemen's club on 0.46-acres lot, located in Tampa, Hillsborough County, FL.

The purpose of this refinance is to provide cash out to purchase a luxury hotel/bed and breakfast property in St. Petersburg, Florida. The subject property is currently free and clear of any liens or mortgages. This is the first of two loans that we will be making for this borrower.

Hillsborough County is located in the west-central portion of the U.S. state of Florida. In the 2020 census, the population was 1,459,762, making it the fourth-most populous county in Florida and the most populous county outside the Miami metropolitan area. A 2021 estimate has the population of Hillsborough County at 1,512,070 people with a yearly growth rate of 1.34%, which itself is greater than the populations of 12 states according to their 2019 population estimates. Its county seat and largest city is Tampa. Hillsborough County is part of the Tampa–St. Petersburg–Clearwater Metropolitan Statistical Area.

According to the U.S. Census Bureau, the county has a total area of 1,266 square miles, of which 1,020 square miles are land and 246 square miles (19.4%) are covered by water. About 158.27 miles of shoreline are on Tampa Bay. The county's unincorporated area is around 888 square miles, more than 84% of the total land area. Municipalities account for 163 square miles. The modern boundaries of the county place it midway along the west coast of Florida.

Tampa is a city on the Gulf Coast of the U.S. state of Florida. Tampa's borders include the north shore of Tampa Bay and the east shore of Old Tampa Bay. Tampa is the largest city in the Tampa Bay area and the county seat of Hillsborough County. With an estimated population of 403,364 in 2023, Tampa is the 49th-most populous city in the country and the third-most populous city in Florida after Jacksonville and Miami. Tampa is part of the Tampa-St. Petersburg-Clearwater, Florida Metropolitan Statistical Area, which is a four-county area composed of roughly 3.1 million residents, making it the second-largest metropolitan statistical area (MSA) in the state and the sixth largest in the Southeastern United States, behind Dallas-Fort Worth, Houston, Washington D.C., Atlanta, and Miami. The Greater Tampa Bay area has over 4 million residents, and generally includes the Tampa and Sarasota metro areas.

In 2022, the median property value in Tampa, FL was $333,200, with a homeownership rate of 50.5%, and the median household income was $66,802. The economy of Tampa, FL employs 195k people. The largest industries in Tampa, FL are Health Care & Social Assistance (27,027 people), Professional, Scientific, & Technical Services (22,816 people), and Retail Trade (18,960 people), and the highest paying industries are Management of Companies & Enterprises ($91,458), Utilities ($85,705), and Professional, Scientific, & Technical Services ($78,776). The largest universities in Tampa, FL are University of South Florida (14,285 degrees awarded in 2022), Hillsborough Community College (7,304 degrees), and The University of Tampa (2,488 degrees).

SUBJECT PROPERTY DETAILS

The subject property is located in the Tampa area of the Northwest Tampa submarket. The immediate area of the subject is characterized by industrial uses with residential and commercial uses in the surrounding area. The subject property consists of a single parcel that is rectangular in shape and totals 0.46-acres. The site is generally level in topography and is equipped all utilities and 27 parking spaces.

The subject site is improved with a 2,858SF building, constructed in 1954. The building is 100% owner-occupied and currently operates as a gentlemen's club with a full liquor bar known as Class Act Showbar. The building is rectangular in shape and is equipped with a concrete block foundation, masonry frame and stucco exterior walls and a built-up tar and gravel roof. It is also equipped with some asphalt paved areas, two entrance porches and a fence.

The interior includes acoustic tile panel, 10’ ceilings and ceramic tiles and exposed concrete flooring. The layout consists of a reception area, an open dance floor, a bar, small private rooms, restrooms, a DJ booth, storage rooms, a walk-in freezer, a small kitchen, and an office. The property can also accommodate other similar uses, such as a bar, nightclub, or restaurant, with minimal or no conversion costs. It should be noted that, at the time of the appraisal inspection, minimal deferred maintenance items were observed. These included the need for new paint, some cleaning, and minor drywall repairs. While the cost to cure these items was not provided, the appraiser estimated it would be approximately $5,000.

The borrower is a married man who currently holds title to the property personally. However, at the close of escrow, he will transfer title to a newly formed LLC (December 2024) of which he is 100% member. He will be providing a personal guarantee on our loan, however his wife will not be on the loan nor providing a personal guarantee.

The operating entity, a Corporation (Gentlemen’s Club) will be providing a corporate guarantee on our loan. This entity was formed in 1995 and is 100% owned by our guarantor. In 2023, it reported net business income of $376,848 and in 2022 reports net income of $198,901. We were also provided a profit & loss statement for 2024 showing net income of $1,037,810.

Our guarantor is the owner and operator of multiple bars/gentlemen’s club. Per his 2023 personal tax return, he reported an adjusted gross income of ($664,776) and ($1,373,224) in 2022. The reason for these large losses on his personal tax returns are due to carry-over losses from several years ago. A letter of explanation will be provided in the due diligence package. He self-reported a net worth of $6,924,821 and has a mid-credit score of 763.

The borrower purchased this property on August 19, 2019 for $400,000. It is currently free and clear of any liens. Please note the borrowers are currently part of a pending civil litigation in Hillsborough County, FL. A Letter of Explanation will be provided in the Due Diligence file for your consideration.

We hired a local MAI appraiser who valued this property at $1,110,000 (AS-IS). We also hired a local broker who performed a drive-by opinion of value (BPO) and valued this property at $754,000.

At an 12.0% yield to investors and a 48.7% 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.

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.
Return to C-Loans Home Page | Return to Blackburne & Sons Home Page
Copyright © 2025 Blackburne & Sons Realty Capital Corporation. All rights reserved. (800) 606-3232