Nebraska Avenue Gentlemen's Club

George says: "This deal has a 12% yield. Normally, I hate high-yield deals because the high payments grind our borrowers into the dust. There are two exceptions - cannabis deals and nudie bar. Historically, nudie bars have paid us very well (careful, past performance is no guarantee of future results)."

Blackburne & Sons is pleased to present this First Mortgage secured by a 4,261SF gentlemen’s club on 0.75-acres lot, located in Tampa, Hillsborough County, Florida.

The purpose of this refinance is to provide cash out to purchase a luxury hotel/bed and breakfast property in St. Petersburg, Florida. Please be advised that the luxury hotel / bed & breakfast will NOT be part of our collateral. The subject property is currently free and clear of any liens or mortgages. This is the second of two loans that we are providing for this borrower. There are currently $12,738 in property taxes that are owed and will be paid in full at closing.

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 an existing retail, gentlemen's club building located west side of N Nebraska Avenue in Tampa, Florida.

The improvements consist of 4,261 square feet of net rentable area (NRA) as of the valuation date. The property was reportedly built in 1948, is approximately 100% owner-occupied and currently operates as a gentlemen's club with a full liquor bar known as The Pink Pussycat Lounge. At the time of inspection, the property was in average overall condition with minimal deferred maintenance. The property provides 62 parking spaces.

The interior layout includes a reception area, an open dance floor, a bar, small private rooms, restrooms, a DJ booth, storage rooms, a walk-in freezer, private rooms, 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.

Per the appraiser, the building had some recent expansions and repairs. The cost of these repairs and expansions was not disclosed. However, at the time of the inspection, minimal deferred maintenance items were observed, including the need for new paint ($2,000), intensive cleaning ($1,200), exterior overhang repairs ($3,000), ceramic tile repairs ($3,500), bathroom fixture repairs ($2,000), minor drywall repairs ($1,000), and contingencies ($1,000). While the exact cost to cure these items was not provided, the appraiser estimated the total to be approximately $13,700.

Title to the subject property is held through a Corporation consisting of two individuals who both hold 50% membership. The Corporation that holds title to the real estate is a holding company. The Gentlemen’s Club business is also held through a Corporation and is the Operating Company. Each of the above mentioned guarantors also hold 50% membership in the Operating Company, and this entity will provide a Corporate Guarantee on our loan. This entity reported net income of $66,719 in 2023 and $3,673 in 2022. We were provided a 2024 profit & loss statement for the operating entity which shows net income of $412,673.

The first guarantor is a married man who will be providing a personal guarantee on our loan, however his wife will not be on the loan or providing a personal guarantee. He self-reports a net worth of $6,924,821 and has a mid-credit score of 763. He 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.

The second guarantor is a single man. He self-reports a net worth of $988,422 and has a mid-credit score of 692. His 2023 personal tax returns reported adjusted gross income of $34,665 and in 2022 he reported a loss of $7,847. This guarantor will provide a personal guarantee on our loan.

The borrowers purchased the property on February 22, 2016 for $360,000. 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 $1,565,000 (AS-IS). We also hired a broker who performed a drive-by opinion of value (BPO) and valued this property at $1,311,067.

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