First Trust Deed collateralized by a 2.6-acre parcel of land located in Paradise Valley, AZ (approximately 16 miles northeast of downtown Phoenix, AZ). The borrower acquired the land about a year ago and has since worked with the city to obtain a parcel split. The parcel split, which will happen in December 2019, will enable the development and ultimately the construction of two residential homes. Before the parcel split can be completed, the borrower will need to demolish the existing 4,000 square foot home. Once the demolition is complete and parcel split is finalized, the borrower will begin work on the private street to allow access to the back lot. Additionally, the borrower already has the front lot under contract which will create a paydown of $950,000. It is the borrower’s intent to sell the second lot to pay off the remaining loan. If they don’t find a buyer before the parcel split is completed, the buyer will obtain bank financing to complete the construction of the home. If this scenario happens, the loan would subordinate to the construction financing, effectively putting the investors capital into second position on the second lot.
Loan Amount: $1,700,000
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 ninemonth extension.
Onsite Video: JUST RELEASED: Cullum Homes Inc. #4612 | ARIZONA