London Ohio Residential

George Says: "Each of my three children took years of horseback riding lessons, and my granddaughter is taking them riding lessons now as well. There is a reasonable demand for properties like this."

Blackburne & Sons is pleased to present this First Mortgage secured by a 2,070SF single family residence and four outbuildings / barns that are 7,728SF, 3,520SF, 1,620SF and 1,248SF all on 10.64 acres, located in London, Ohio.

The proceeds of this loan will go towards paying off the current note holder in the amount of $360,000, closing costs and roughly $14,000 cash out.

Madison County is located in the central portion of Ohio. As of the 2020 census, the population was 43,824. The county is named for James Madison, President of the United States and was established on March 1, 1810. Its county seat is London and Madison County is part of the Columbus, OH Metropolitan Statistical Area.

According to the U.S. Census Bureau, the county has a total area of 467 square miles, of which 466 square miles is land and 0.8 square miles (0.2%) is water. Major highways include I-70, I-71, US 40 and US 42. Madison County is also home to the Ohio Peace Officer Training Academy, the Ohio Bureau of Criminal Identification & Investigation, and several prison facilities.

CITY INFORMATION

The city of London is located about 25 miles southwest of Columbus. It was established in 1811 to serve as the county seat and is part of the Columbus metropolitan area. The population was 10,279 at the 2020 census. According to the United States Census Bureau, the city has a total area of 8.45 square miles (21.89 km2), all land.

In 2020, the median property value in London was $149,200, with a homeownership rate of 59.1%, and the median household income was $56,401. The economy of London, OH employs 4,790 people. The largest industries in London, OH are Manufacturing (959 people), Health Care & Social Assistance (612 people), and Retail Trade (577 people), and the highest paying industries are Finance & Insurance ($73,147), Information ($68,625), and Finance & Insurance, & Real Estate & Rental & Leasing ($59,009).

The subject property is located approximately 31 minutes away from downtown Columbus, Ohio enhancing its connectivity with convenient access to I-70. The subject neighborhood consists of mature rural community featuring primarily single-family homes (median age 64 years). The utilization of well water, septic systems, and alternative fuel sources is common within this region. The property consists of 10.64-acres that is irregular in shape and zoned agricultural. It is improved with a single-family residence and four outbuildings.

The single-family residence is a 2,070SF, ranch style home built in 1998. It contains 3 bedrooms, 2.5 bathrooms, and has a 908SF basement. The house is also equipped with a 549.05SF attached 2-car garage and a four-car driveway. The building was made with concrete block foundation walls and is equipped with a metal roof. It is currently leased for $2,600 per month which started in March 2023 and is a one year lease.

The property functions as a horse boarding and training facility and includes 4 outbuildings totaling 14,116SF. The outbuildings are equipped with several horse stalls and have accommodated up to 28 horses within a year. At least one of the outbuildings is used for storage. The entire horse boarding and training facility is currently leased to the same tenant as the SFR for $2,600 per month which also started in March 2023, and is a one year lease. This tenant is paying $5,200/mo total, until Feb 2024, then the leases will be month to month.

Our borrower’s purchased the subject property in 2017 for $125,000 and have reportedly made approximately $250,000 in property improvements since then.

Our borrower is a married couple who hold title through a Limited Liability Company. The wife is 100% owner/member of the LLC, however both of them will provide a personal guarantee on our loan. The LLC does not file separate tax returns and instead reports its income through the borrower’s personal tax returns.

The husband works as a highway worker for ODOT, and the wife works as a Facility Manager for COTA. They self-reported a net worth of $849,000 and have mid-credit scores of 539 and 486. Please see letter of explanation on low credit scores in the due diligence package. In 2022, their personal tax return reports adjusted gross income of $88,608. In 2021, they reported adjusted gross income of $142,731. They are curently paying $1,000 biweekly on their credit debt via a debt collection company. They are in good standing with the payments.

At a 11.0% yield to investors and a 65.3% LTV, 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.

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 Justine Smith
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
Publicly advertised to California residents only under California Department of Corporations business plan permit.
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