First Trust Deed collateralized by approximately 10 acres of land that was once a golf course. Half of the former golf course site has been sold to a national home builder K Hovnanian Homes who has already begun building on the site. K Hovnanian is currently building townhomes ranging from 1,223 square feet to 1,498 square feet with an average closing price around $310,000. The other half of the golf course will be sold to our borrower who will be utilizing the site as a “build to rent” product. All the townhomes our borrower will build will be held onto and operated like an apartment complex instead of being sold off to end users once they are completed. The borrower has already closed on the first of two phases and this loan will encumber the second of two phases (approximately a quarter of the former golf course).
Loan Amount: $3,900,000
Yield: 10.5% (Principal Balance ≥ $100,000); 10.0% (Principal Balance < $100,000). Interest is paid monthly in arrears with payments due on the 1st of each month with a 10-day grace period.
Term: Nine months with an optional nine-month extension periods at maturity.