Single Family Rehab in New Jersey

157 Linden St, Bridgewater, NJ 08807

  • 12% EST. Annual yield
  • $200,000 Funding Needed
  • 67% ARV
  • 12Months Loan Term
  • Single Family Project Type

$200,000 funded of $200,000

$5000 Minimum

Investment Summary

This is a loan with an expected return of 12% to Investors and has a 12 month term. The debt is secured by a first position lien on the title of the property along with a signed personal guarantee from the Developer. The Developer is purchasing this through an accepted short-sale offer at a purchase price of 66% of the appraised value and 63% of the last sale price from 2007.

The Developer is requesting $15,000 to be used for very light rehab and intends to place the property back on the market priced for quick sale within 12 months. Patch of Land has already pre-funded this opportunity with internal funds and is now offering the project to our clients.

Financial Overview
Investment Needed Minimum Investment Loan Term Expected Annual Yield
$200,000 $5,000 6- 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.

Appraised Value: 66% Loan to Appraisal Value  $300,000
Zillow Estimate: 68% Loan to Zillow Estimate Approx. $295,000
2012 Tax Value Assessment: 71% Loan to Assessed Tax Value Approx. $280,400

 

Property Overview

57 Linden St is a gorgeous, heavily updated, 3 bed / 2 bath in a quiet, friendly neighborhood. It is 1,742 sqft on a 10,000 sqft lot. This home has high-end appliances and granite countertops. The property resides in an excellent school district including Bridgewater-Raritan High, which is ranked in the 97th percentile (peer rank). Bridgewater is a relatively large, mostly affluent suburban township located in the center of Somerset County and has a median household income of $108,680. Bridgewater is also the terminus for the Raritan Valley commuter rail line with connections through Newark and on to New York City.

Remodeling

This property was built in 1950 and has been recently updated. It will require minor rehab, cleaning and maintenance to bring the home into a marketable condition. Repairs include part of the roof near a vent along with replacing the vent and the cover, external frame at backdoor and installing a new storm door, replacing baseboards in 2 rooms along with trims and new wood laminate in some rooms, some carpeting, replace window sill in one room, repair several small holes in sheetrock throughout, paint 4 rooms and other minor maintenance. Please refer to the labor and supplies estimates included in the documents section.

Borrower

The Developer is an established real estate broker and Bank REO specialist with a long history in this market. He has worked with Coldwell Banker LIberty, Re/Max and Century 21. In addition to successfully rehabbing dozens of distressed properties, he has also completed over 500 broker price opinions (BPO) on commercial and residential properties. He is a graduate of Kean University and the New Jersey school of Real Estate. Learn more on the Developer tab.

Financial Details

Structure Overview
  • 12% APR with expected 12 month hold term
  • Loan secured by first position on title
  • Two personal guarantees on the loan
  • Updated 3 Bed / 2 Bath at a 33% discount from $300,000 appraised value
  • 1,742 sqft on a 10,018 sqft Lot
Capitalization

The below financial estimates are based on Patch of Land's investment of $200,000 to the developer that will hold title to the property at 157 Linden St, Bridgewater NJ

Purchase Price:  87.50% $175,000
Rehab Supplies and Materials: 6.00% $12,000
Rehab Labor: 1.75% $3,500
Origination and Processing Fees: 4.75% $9,500
Total Costs:   $200,000
Valuation

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

Appraised Value:  66% Loan to Appraisal Value $300,000
Zillow Estimate: 68% Loan to Zillow Estimate Approx. $295,000
 2012 Tax Value Assessment:  71% Loan to Assessed Tax Value $280,400
Distributions

Interest will begin to accrue at the date each investors funds clear escrow. Distributions of interest will be paid quarterly as loan payments from the developer are processed. Borrower will pay monthly interest payments in the amount of approximately $1,666.67 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 November 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

Xavier Ordonez Headshot

Xavier Ordonez LinkedIn
About Xavier Ordonez

The Developer is an established real estate broker and Bank REO specialist with a long history in this market. He has worked with Coldwell Banker LIberty, Re/Max and Century 21. In addition to successfully rehabbing dozens of distressed properties, he has also completed over 500 broker price opinions (BPO) on commercial and residential properties. He is a graduate of Kean University and the New Jersey school of Real Estate.

Questions on Single Family Rehab in New Jersey
11/27/13

From SL

The facts and figures are clear, thanks. Cosmetically, does the property have a fence around the border, or are those the neighbors fences. Has the developer considered replacing with hedges?

Answer by Patch of Land

Thank you for your question Scott. Per the Developer:

"On 157 Linden St Branchburg, Nj we didn't factor in new hedges because they are in good condition, we decided to focus more on the improvement itself inside and out. We had some realtors and buyers over the property right after the tenants left and told them what the improvements done to house will be and they were really excited. We already have pre-set scheduled appointments for showings for the end of rehab week of december 20th."

12/4/13

From SL

The papers mention the set-up of an FDIC account in my name. Do you do that or me? Are there fees on the account? What’s my ability to withdraw funds as they are paid back on the loan? Are withdrawals only by wire?

Answer by Patch of Land

The account set up is done automatically through our system through our Partner, BancBox, a third party escrow servicing company. There are no fees associated with the account and you can access it independently of Patch of Land. You will be able to withdraw funds available in your account as soon as they are disbursed by electronic bank ACH, wire or receive a paper check. Disbursements will be on a quarterly basis with the Georgia deal, and monthly or quarterly on future projects. It's important to us to keep fees as low as possible and that there's no hassle for our Investors.

12/4/13

From SL

I’m not that close to insurance on homes. I see coverage for fire. Will that ground-up replacement value? That is, build-new wouldn't cost more than the appraised value of the existing property?

Answer by Patch of Land

While new development costs on a completely destroyed property would depend on several factors, including a cost-to-build per square foot, which has lately been higher than a cost-to-purchase, Patch of Land is named as the beneficiary on the insurance policy. If the property was destroyed, we would receive the insurance payment which would allow us to compensate our Investors.

12/4/13

From SL

Is all the paperwork signed and countersigned electronically?

Answer by Patch of Land

Yes, all paperwork is signed electronically through the checkout process. You can log in and test the system if you'd like by starting an investment and viewing the documents in the 3rd step. Your investment isn't finalized until you accept and sign the documentation then confirm the order in the review step and then your funds are received. Let me know if you have any questions with the process.

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Project Updates & Related News
  • Rehab in Progress

    Rehab is scheduled to be completed near the end of December and, per the Developer, there are already appointments made to show the property to prospective buyers with a large amount of interest. We'll keep you updated on the buyers!→ Read More

    Rehab in Progress

    Rehab is scheduled to be completed near the end of December and, per the Developer, there are already appointments made to show the property to prospective buyers with a large amount of interest. We'll keep you updated on the buyers!
  • Loan executed and sent to Developer

    Patch of Land has accepted the project, executed the loan documents, and sent funds to the Developer. The opportunity to get in on this deal will be unlocked soon!→ Read More

    Loan executed and sent to Developer

    Patch of Land has accepted the project, executed the loan documents, and sent funds to the Developer. The opportunity to get in on this deal will be unlocked soon!
  • 1st Developer Payment Received!

    Patch of Land has received the first payment from Xavier Ordonez, 157 Linden's professional developer. Click read more to see the check!→ Read More

    1st Developer Payment Received!

    Patch of Land has received the first payment from Xavier Ordonez, 157 Linden's professional developer. Click read more to see the check!