2-Property Package Outside Manhattan

Multiple addresses

  • 12% EST. Annual yield
  • $156,000 Funding Needed
  • 37% ARV
  • 12Months Loan Term
  • Bulk Residential Project Type

$156,000 funded of $156,000

$5000 Minimum

Investment Summary

This is a 12 month loan with an expected return of 12% to investors. The debt is secured by a first position lien on the title of two properties along with a signed personal guarantee from the Developer. Both properties are currently owned completely by the developer and the loaned funds are being used to remodel and update the properties into marketable condition. The Developer is requesting $156,000 to be used for extensive rehab on two properties and intends to repay the loan in 12 months. Patch of Land has already pre-funded this opportunity with internal capital and is now offering the project to our clients.

Financial Overview
Investment Needed Minimum Investment Loan Term Expected Annual Yield
$156,000 $5,000 12 months 12%
Valuation

We have done our due diligence on this property and have found the following valuation ratios demonstrate what we believe to be a strong investment opportunity.

Comparative Market Value: 37% Loan to CMA Value  $419,000
Trulia Estimate: 36% Loan to Trulia Estimate Approx. $438,513
2013 Tax Value Assessment: 140% Loan to Assessed Tax Value Approx. $111,100

 

Property Overview

64 Rutgers is a two family residential property with 4 bedrooms over 3 and two bathrooms. It needs extensive rehab but stands in a location with strong rent rolls. A broker price opinion and comparable market analysis has determined the property is worth roughly $200,000 while the developer estimates reasonable rent pricing to be between $1400 and $1800 a month. The property is in a well established blue collar neighborhood and is seeing growth from commuter overflow from Manhattan. It is within a mile from the waterfront and within a half mile from the Trump Plaza. The developer intends to place tenants after rehab and to sell this property as a turnkey cash-flow opportunity.

170 Claremont is a single family residential that was previously being used as a two-flat. While it has been designed as a two family and contains two kitchens and separation between living spaces, it wasn’t up to code as a multi-family residential. The property is in very good condition and does not need extensive updating besides some aesthetic work on the kitchens. The rehab funds, in this case, are being used to remodel the property from a legal 1 family into a legal 2 family. Comparable market analysis prices this property at roughly $210,000 and it will require $50,000 to redevelop into a multi-family. This property also resides in a commuter neighborhood just outside of Manhattan.

 

Remodeling

64 Rutgers will require a full “gut” rehab including new heater, appliances, paint, molding, Please refer to the labor and supplies estimates included in the documents section. 170 Claremont will need a kitchen aesthetic upgrade and cleaning, new paint and carpeting and other minor work to turn the property into a nice multi-family dwelling. Refer to the architectural plans in the property documents section for detailed specifications.

Borrower

The borrower, Christopher Goodson of Goodson Law Offices, is a highly experienced real estate attorney specializing in real estate investment. Mr. Goodson is also the president of the New Jersey Real Estate Investment Club. Mr. Goodson is currently marketing the property to several interested end buyers and intends to finalize resale within 120 days. The short sale approval specifies that Mr. Goodson cannot resell the property within 90 days however. Mr. Goodson has arranged a short term “Bridge Loan” from Patch of Land and we have been able to provide a strong interest rate on this loan. The funding was provided to “Grant Montgomery LLC” of which Christopher Goodson is the sole member. His legal practice manages approximately 30 property closings per month.

Financial Details

Structure Overview
  • 12% APR with expected 12 month hold term
  • Loan secured by first position on titles of both properties
  • Personal guarantee by Developer on entire loan
  • 38% LTV
  • Highly experienced and professional Developer
Capitalization

The below financial estimates are based on Patch of Land's investment of $156,000 to the developer that will hold title to the properties at 64 Rutgers Ave and 170 Claremont Ave, Jersey City, NJ.

Purchase Price:  (Developer already owns properties)
Rehab Supplies and Materials: 70.51% $110,000
Rehab Labor: 19.23% $30,000
Back Taxes and Water Bills 6.41% $10,000
Origination and Processing Fees: 3.84% $6,000
Total Costs:   $156,000
Valuation

After completing our due diligence, Patch of Land believes this project to be a strong investment opportunity.

Comparitive Market Value:  37% Loan to CMA Value $419,000
Trulia Estimate: 36 Loan to Trulia Estimate Approx. $438,513
 2013 Tax Value Assessment:  140% Loan to Assessed Tax Value $111,100
Loan to tax value ratio is artificially high because the Developer purchased at a significantly under-market purchase price at foreclosure.
Distributions

Interest will begin to accrue at the date each investors funds clear escrow. Distributions of interest will be paid monthly as loan payments from the developer are processed. Borrower will pay monthly interest payments in the amount of approximately $1,300.00 monthly to Patch of Land which will in turn be distributed to you as an Investor quarterly at your fractional investment amount. Total repayment of capital is expected on or before the end of December 2014. Distributions will be made directly into each investors Patch of Land accounts online.

Timeline

A timeline is not available for this project

Development Partner Details

Christopher Goodson

LinkedIn Profile
About Castle & Pierce LLC & Five Star Funding LLC

Castlestone & Pierce, LLC and Five Star Funding, LLC are solely owned by Christopher J. Goodson who is a highly successful real estate investor and developer. At any one time, Mr. Goodson is actively participating in seven or more rehab projects. He also owns Goodson Law Offices, LLC , his personal five attorney law office located in Montclair, New Jersey.

In 2004, Christopher Goodson, Esq. founded the New Jersey Real Estate Investment Club through which he teaches, mentors and shares his love of both real estate and networking. The organization has monthly meetings and continues with a dedicated and growing membership. This allows Mr. Goodson to identify deals in this space through close contacts with major banks and brokers.

Although Mr. Goodson was educated at both Cornell University and Boston College Law School, he credits his extensive knowledge of real estate investing to his experiences with his law clients and the membership of the New Jersey Real Estate Investment Club.

Questions on 2-Property Package Outside Manhattan
12/11/13

From M.D.

Is this project secured by the titles of each property?

Answer by Patch of Land

Yes, Patch of Land has first position on the titles for BOTH properties and each is included as security on a single loan to the developer.

12/11/13

From T.M

What are the exit plans for these properties?

Answer by Patch of Land

The developer has stated that after rehab, 64 Rutgers will be leased out to tenants and then placed on the market as an existing cash flow property. 170 Claremont will be rehabbed into a legal multi-family, leased and either sold on the open market or refinanced and kept by the developer.

12/11/13

From S.S.

How long is the rehab process expected to take?

Answer by Patch of Land

The developer estimates a 3 to 4 month rehab timeline for the Claremont property and a 4 to 6 month timeline for the Rutgers property, run concurrently.

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Project Updates & Related News
  • Accepting Funding!

    Patch of Land has pre-funded a loan for this small bulk package of two properties 30 minutes outside Manhattan. We're opening this opportunity up to our Investors now. Please contact us with any questions! We're available via live chat, at (888) 959-1465 or via the Questions tab directly on the investment detail page.→ Read More

    Accepting Funding!

    Patch of Land has pre-funded a loan for this small bulk package of two properties 30 minutes outside Manhattan. We're opening this opportunity up to our Investors now. Please contact us with any questions! We're available via live chat, at (888) 959-1465 or via the Questions tab directly on the investment detail page.