Cameron Park CA Residential Fix and Flip

George says: "This will be the 28th loan we have made for one of these fix-and-flippers, so we absolutely know he has experience. "

Blackburne & Sons is pleased to present this purchase money First Trust Deed secured by a single-story, 1,705 SF single family residence with three bedrooms and two bathrooms on a 0.33-acre parcel located in Cameron Park, El Dorado County, California.

The purpose of this loan is to purchase the subject property for $425,000. One of the borrowers is an experienced fix & flipper and has been working with Blackburne & Sons for the past 10 years. He plans to put approximately $15,500 worth of improvements into the property post purchase. He will be paying for these improvements out of pocket and Blackburne & Sons will not be holding back any funds. The borrowers will be coming to closing with approximately $127,500 cash down plus closing costs.

COUNTY INFORMATION

El Dorado County is a county located in the U.S. state of California. As of the 2020 census, the population was 191,185. The county seat is Placerville and the county is part of the Sacramento-Roseville-Arden-Arcade, CA Metropolitan Statistical Area. It is located entirely in the Sierra Nevada, from the historic Gold Country in the western foothills to the High Sierra in the east. El Dorado County's population has grown as Greater Sacramento has expanded into the region. Where the county line crosses US 50 at Clarksville, the distance to Sacramento is 15 miles. In the county's high altitude eastern end at Lake Tahoe, environmental awareness and environmental protection initiatives have grown along with the population since the 1960 Winter Olympics, hosted at the former Squaw Valley Ski Resort in neighboring Placer County.

According to the U.S. Census Bureau, the county has a total area of 1,786 square miles, of which 1,708 square miles is land and 78 square miles (4.4%) is water. The county, owing to its location in the Sierra Nevada, consists of rolling hills and mountainous terrain. The northeast corner is in the Lake Tahoe Basin (part of the Great Basin), including a portion of the lake itself. Across the Sierra crest to the west lies the majority of the county, referred to as the "western slope."

A portion of Folsom Lake is in the northwest corner of the county. Much of the county is public land. The Eldorado National Forest comprises a significant portion (approximately 43%) of the county's land area, primarily on the western slope. The Lake Tahoe Basin Management Unit, formerly part of the Eldorado and two other National Forests, manages much of the land east of the crest. The Pacific Crest Trail runs through the eastern part of the county, along or roughly paralleling the Sierra crest. The county is home to the Desolation Wilderness, a popular destination for hiking, backpacking, and fishing.

CITY INFORMATION

Cameron Park is a census-designated place (CDP) in El Dorado County, California, United States and is part of the Greater Sacramento Area. The population was 19,171 in the 2020 census, up from 18,228 in 2010. Cameron Park is a community located in the Northern California Gold Country of the Sierra Nevada foothills, approximately 30 miles (50 km) east of Sacramento and 70 miles (110 km) west of South Lake Tahoe. According to the United States Census Bureau, the CDP has a total area of 11.2 square miles (29 km2), of which 11.1 square miles (29 km2) is land and 0.1 square miles (0.26 km2) (0.62%) is water (Cameron Park Lake).

In 2021, the median property value in Cameron Park, CA was $490,900, with a homeownership rate of 67.2%, and the median household income was $82,429. The economy of Cameron Park, CA employs 8.11k people. The largest industries in Cameron Park, CA are Retail Trade (871 people), Professional, Scientific, & Technical Services (833 people), and Manufacturing (819 people), and the highest paying industries are Finance & Insurance ($82,656), Finance & Insurance, & Real Estate & Rental & Leasing ($81,026), and Public Administration ($78,523).

SUBJECT PROPERTY DETAILS

The subject property consists of a single-story, 1,705SF, ranch style single family residence with three bedrooms and two bathrooms and a 2-car garage on a 0.33-acre parcel. The property was built in 1986. The neighborhood consists of good quality single family homes on standard sized lots. Most residential amenities including schools, parks, and shopping facilities are located within 1 - 3 miles of this neighborhood.

The improvements are equipped with a concrete slab foundation, central heating and air and a 2-car cement driveway. The property is situated on a rectangular parcel and has an effective age of 30 years. It is also equipped with a patio / porch.

The borrowers plan on putting $15,500 into the property post-closing, and then plan on flipping the property for profit. The planned renovations include paint interior & exterior, remove & replace existing flooring, remove & replace existing old appliances, backyard cleaning & landscaping, repair all dry rot (around windows & storage), replace broken storage door, front yard landscaping & tree trimming. They will put on the market for approximately $615,000.

BORROWER SUMMARY

Our borrowers are two men, one is married and one is unmarried. They will hold title to the property personally. The unmarried man is a repeat borrower of Blackburne & Sons, for whom we have funded a total of 27 loans for. All loans have subsequently been paid off, aside from a land loan he currently has with us and most recently a residential property in Sacramento. He is planning on putting that residential property on the market in the upcoming next two weeks. Most of the loans we have made for him were residential fix & flips. He has worked for the State of California Department of Water Resources as a Civil Engineer for the past 16+ years.

He reports a net worth of $1,425,775 and has a mid-credit score of 553. In 2022, he earned $103,353 in wages through is state job, however his adjusted gross income was $56,511 due to a $45,000 loss on an apartment complex that he owned and was doing renovations on. He has since then sold that property. In 2021, the borrower reported an adjusted gross income of $78,681. We were given a 2023 W2 that shows $110,719 in State Wages. He has not yet filed 2023 taxes.

The second borrower is a married man and also works for State of California Department of Water Resources as a Civil Engineer for the past 30 years. He reported an adjusted gross income of $95,579 in 2022 and $98,088 in 2021. He has a mid-credit score of 669 and self-reported a net worth of $1,362,957. His wife will not be a part of this purchase or on our loan. This borrower provided a 2023 W2 which shows $153,636 in State Wages. He has not yet filed 2023 taxes.

VALUATION SUMMARY

We hired a local Certified General Appraiser who valued this property (AS-IS) appraised value of $460,000.

At a 10.0% yield to the investors and a 64.7% LTV (AS-IS) Appraised Value and 70.0% 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.

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