All in at 69% of Market Value.
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The mortgage note sale of 8684 US RT 68 Rushsylvania OH 43347, is a 20 acre horse farm in Central OH. The property has a 15 stall horse barn that is 60′ X 180′. The barn has its own septic tank and water. Outside the horse barn is a horse washing area. The tool shed includes an office, electric, and concrete floors throughout and measures 90′ X 120’. The pastures are fenced in with gently rolling hills and a pond.
Raw land in the area is selling for between $4,000 and $8,000 an acre. Houses on 1 acre between 2100 sq’ and 2500 sq’ are selling in the mid 170’s.
The homes for sale are distressed properties and need to be raised and come down. The horse barn and tool shed need cleaned out. The tool shed a new roof, 2 doors, piece of metal hung. In the horse barn water and electric and repairs to the hay mound floor.
The pastures are fenced in but due need maintenance. The grounds need trashed removed and brush hogged to remove over growth.
Between the 2 houses and the cleanup of the farm the budget is $ 92,500.00 (preliminary number) .
This rehab will take 180 days
Investment Summary and Potential Returns –
This is an investment of $350,000 for a mortgage note on a farm that has a market value of $580,686. CORI LLC is selling a mortgage note of $367,500 on the horse farm. Cash Flow form notes on the 23 payments of $1,972.82 that will be paid monthly and 1 balloon payment of $358,351.45 will be paid on the 24th month. The amortization period on the mortgage note is figured on 30 year term. The total interest paid to the note real estate buyer is $36,226.31.
The Opportunity and Business Plan
The opportunity for this property is bring the property from its distressed state back to After Repair Value of $580,686. This can be accomplished by raising the 2 single family properties that are currently on the farm. The plan is to then build a 2300 square foot two story house on a slab for $75.00 a square foot for a build cost of $172,500. This alone will add a value to property of 175,000 to 185,000.
The acreage does need cleaned up and trash removed. The pastures are fenced in but do need minor repair and painting. The horse barn needs a new roof and cleaned out; along with electric and water. The tool shed does have a office and concrete floors throughout. The property needs cleaned out, 2 doors installed, and a piece of metal hung on wall. The total budget for this is $92,500; this will bring the property to the value of $580,686. The all in cost of the project is 350,000, which is 60% of after repair value.
CORI LLC is offering a 12 month Mortgage Note with a option of an additional 12 months. The terms on the mortgage note are a return of 5% interest figured annually and amortized over 30 years, with a payment of $1972.82 and a balloon in 24 months or when deed transfers. The Note sale is a first lien position on the 20 acre farm.
Purchase Prices $110,000
Repair Escrow – $ 265,000.00
All funds are dispersed as draws according to schedule. Funds are deposited into Title Company’s escrow account at closing.
Closing costs if any include lender origination fees, appraisal, property inspection, legal fees,
Recording fees, and transfer taxes.
Repair escrows are kept in the operating account at Title Company until needed and dispersed according to the draw schedule. Due diligence period on property will begin 5/21/2016. Contractors will walk properties and hard numbers will be given.