$400K or $800K Note - Private Lender Sought
The borrower is a real estate developer who obtained a pair of private loans to purchase a piece of property (7.48 acres). The borrower has paid for the past five months without issue. A balloon payment for the $400K on the first note is due April 1, 2018. The other $400K note will be due in the Fall of 2018.
Borrower is seeking a new one-year interest only private loan in order to extend the balloon payments. The new loan can either be for $400K or $800K.
The property was purchased for $1.1 million. It is raw land being developed in the cannabis corridor of Desert Hot Springs, CA. The land consists of two parcels. County assessment data is shown below. Summary of offer:
- Purchase Price: $1,100,000
- Down payment: $300,000
- Current Outstanding Balance: $800,000
- Current Notes: 1st position $400K; 2nd position $400K
- Assessed Value: $512,040 (parcel one) + $484,500 (parcel two) = $996,540
- Current first position as-is equity: $996,540 - $400,000 = $596,540
- Current second position as-is equity: $996,540 - $800,000 = $196,540
- After development the property is projected to be valued at over $20 million. Undeveloped neighboring properties have sold for as high as $1 million an acre.
Borrower is seeking either a $400K 2nd position loan or a $800K first position loan, interest-only, for 12 months. Either way you'll have approximately $200,000 in equity protection.