Cedar Court Residential

George says, "Wow. Beautiful collateral. Plus, we understand the purpose of the loan."

Blackburne & Sons is pleased to present this new first mortgage secured by a 6,348SF single family residence with a 3,007SF finished basement on a 6.76 acre parcel, located in Swedesboro, New Jersey.

The city of Swedesboro was formed as a borough in Gloucester County on April 9, 1902 and has an estimated 2016 census population of 2,602. Swedesboro is an independent municipality surrounded on all sides by townships, making it one of 21 pairs of “doughnut towns” in the state, where one municipality entirely surrounds another.

Gloucester County is located south of Philadelphia and northwest of Atlantic City and is part of the Camden, New Jersey Metropolitan Division of the Philadelphia-Camden-Wilmington Metropolitan Statistical Area. Gloucester County has a 2017 Census estimated population of 292,206, making it the states 14th most populous county. Various county, state, U.S. routes and interstates pass through the county including interstate 295, U.S. Route 130, 322 and 40. Colleges and Universities in the county include Rowan University and Rowan College at Gloucester County

The subject is located in a suburban residential neighborhood, comprised of homes of various sizes, styles and ages. According to the appraiser, the homes are adequately maintained and future marketability is favorable. Schools, shopping and recreational facilities are nearby. Major employment centers are easily reached via routes 322, 295 and the NJ Turnpike.

The subject property is a 6.76 acre, beautiful two-story colonial style single family residence, comprised of 6,348SF of gross living area, and a 3,007SF full basement used as a theatre room and game room. The home was built in 2007 and consists of 12 rooms, of which 5 are bedrooms and 4.1 are bathrooms. It has a private well, private septic, 3 fire places, an in-ground pool and hot tub, sauna, pole barn, deck, three car driveway and three car garage. Per the appraiser, the building appears well maintained with no physical deficiencies or adverse conditions; only two other homes are reported to be larger than the subject in all of Woolwich Township. The subject property is currently leased to a tenant for $4,600 per month. This lease started in March 2018 and is a month-to-month lease.

Our borrower is an unmarried man and will be holding title to this property personally. In fact, the borrower is a starting offensive tackle for the Philadelphia Eagles (a National Football Team) and has been with this team since 2009. The Philadelphia Eagles proudly won the Super Bowl in February 2018. Prior to playing for the Eagles, he was signed by the Buffalo Bills as an undrafted free agent from 2004-2008, originally as a tight end and played college football at Arkansas. He reports a net worth of $4,539,250 and has a mid-credit score of 689. Per the borrower’s tax returns, in 2017 his income was $11,390,882 and in 2016 it was $8,764,303. As for future earnings, to-date, he has received less than half of his 2018-2019 contract payout of $6.75MM, which will allow for further liquidity and add to his ability for repayment for these mortgages.

This loan is one of three loans to this borrower. Each loan will be secured by three different properties; two residential houses and one commercial property. All loan proceeds will be used to pay down remaining debt that was incurred as a result of an investment that went bad, and to provide design and inventory for a new small business venture. He owes approximately $1.6MM on the outstanding debt.

At a 9.0% yield to investors and a 65.0% LTV. This appears to be a reasonable investment. Investing in any first mortgage involves substantial risk. 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 property almost always needs to be renovated before it can be leased or sold, so be sure to maintain some liquidity.

You should spread your trust deed 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.

Blackburne & Sons Realty Capital Corporation--For more information, contact Angela Vannucci
4811 Chippendale Drive, Suite 101, Sacramento, CA 95841
Telephone: (916) 338-3232 * Fax: (916) 338-2328
Real Estate Broker -- California Bureau of Real Estate -- License Number 829677
Publicly advertised to California residents only under California Department of Corporations business plan permit.
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