The collateral for this loan is 8.28 acres of land located on the Southeast corner of Tropical Parkway and Lamb Boulevard in North Las Vegas, NV (approximately 10 miles Northeast of downtown Las Vegas, NV). Currently the land is zoned C-1 which would allow for the development of a neighborhood commercial building. Although the current zoning allows for a commercial property to be built, the borrower has already begun working with an engineer to obtain approval for a residential project. Given the properties that surround this parcel of land, the borrower is expected to get the approval for the residential project in about six months. The property kitty-corner to this project sold in April 2020 for $454,000 per acre with similar qualities. This loan is at $253,000 per acre. The buyer is able to buy this parcel for much less per acre than the similar lot next to it because the expense estimated to import soil to this property is resulting in a lower perceived value for the land. The land is estimated to need approximately 90,000 cubic yards of dirt to elevate the building pads to allow the sewer to operate properly. Typically, bringing in soil would cost $10 per cubic yard for a total cost of about $900,000; however, the borrower has his own source of fill dirt that he will haul to the property at no cost. Therefore, the borrower is able to acquire the property at a good value.
Loan Amount: $2,095,000
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 at maturity.