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Exhibit B -- Specifics of the Loan
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California Residents Only Loan Number: N1957 |
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PROPERTY Project: JOHNSTOWN MIXED-USE BUILDING
EQUITY ANALYSIS
OPERATING STATEMENT
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TERMS
BORROWERS
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JOHNSTOWN MIXED-USE BUILDING This first trust deed investment is secured by a 6,579SF mixed-use property in the village of Johnstown, Ohio. Johnstown is nine miles northeast of Columbus, Ohio, the state Capitol and home to The Ohio State University. A relatively small community, population 4,016. Johnstown is part of a four thousand acre tract of land deeded to John Brown, a revolutionary soldier, by President Adams for his military services, in 1800. It was incorporated as a village by Dr. Oliver Bigelow, who bought it in 1810. Dr. Bigelow laid out the streets and donated the town square, which still hosts many visitors and residents who stop to enjoy the gazebo, historic Township Hall and the Opera House. The subject neighborhood is the central business district, the older historic section of Johnstown. The property is located on Main Street, which is comprised mostly of small commercial retail and professional office spaces with some residential single family and small multi-family housing. This property is a two-story mixed-use building totaling 6,579SF, with a full basement. The first floor has two retail units and the second floor contains four residential apartments. The exterior consists of a brick front with stucco on the sides and rear. Built in 1910, it has had a number of upgrades and improvements over the years. It was rewired in 1999 with upgraded electrical service, including six individual meters, so that each of the first floor spaces and the second floor tenant apartments could be individually billed. An alley abuts the rear of the property which provides for alternate access, and a public parking lot is directly across the alley The first retail unit is occupied by a retail coin-operated Laundromat operated by the owner’s son/our guarantor. The 1,633SF contains a single large room with both washers and dryers. The interior finishes consist of a drywall-paneled ceiling with a ceiling mounted, gas-fired space heater, plaster and drywall partitions, with commercial grade vinyl flooring throughout. It has overhead fluorescent lighting, a metal door in a light metal frame on the rear, and a glass entry door in a light metal frame on the front with a front standard plate glass window. It has a rear restroom. The second retail unit is vacant but had recently functioned as a pick-up office for a retail dry cleaning firm. It is 1,625SF, comprised of a large room which is divided into a customer lobby area and a large service area. The service area contains a large open space for storage, a small customer dressing area, a mop closet and a restroom. Its finishes are typical – a suspended acoustic paneled ceiling, drywall partitions, and a carpeted lobby with commercial grade vinyl floors elsewhere. The second floor contains four remodeled and updated residential apartments, two 730SF one-bedroom units and two 663SF studio style units. They are each accessed by a front and rear ground level entrances to a common hallway. They are heated with wall mounted electric baseboard heaters and there is no central air conditioning in any of the units. There are modern insulated double hung wood or vinyl sash windows in all of the units, the interior walls have either drywall or sheet paneling partitions, and the floor coverings are either carpeting, vinyl sheeting or lament in each of the apartment spaces. Each of the four apartments has a kitchen with enough counter space for typical food preparation, and the kitchen appliances consist of modern drop in stoves/ oven combinations, a refrigerator and a kitchen sink disposal unit is in each apartment. Title to the property is held in the father's name, having purchased it in 1983. He is retired and has a nearly-perfect 815 mid-score. His son and daughter-in-law are guaranteeing the loan. The son operates the coin laundrymat downstairs and the daughter-in-law is disabled. They also operate another coin laundrymat in Sunbury, OH. Their credit mid-scores are 622 and 545. They claimed net business income of $42,206 and $20,995 on their federal tax returns for 2008 and 2007, respectively. The property is currently free and clear and the net proceeds of the loan will be used to pay off the sons personal debts and clean up his credit. The property recently appraised for $240,000. We also hired two local commercial real estate agents to give us the market value. They both valued the property at $350,000. The father has been trying to sell the property for awhile and it is currently on the market for $375,000. We like small loans on mixed-use properties. Remember, little loans have little payments. At a 41.6% LTV and 12.0% yield, this looks like a reasonable investment. Every first mortgage investment involves substantial risk, so please be sure to read the Risk Factors section of the Offering Circular before investing. A substantial and prolonged decline in real estate values is possible.
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